The proposed combination will create a global leader in sustainable material flow, with numerous valuable customer-facing brands and complementary offerings across its businesses in industries, factories, ports, terminals, road and sea-cargo handling.
Transaction Highlights
- The Future Company will be a customer-focused global leader in sustainable material flow. The Future Company’s illustrative combined annual sales is approximately EUR 7.0 billion and comparable operating profit approximately EUR 565 million based on fiscal year 2019.
- The Future Company is well positioned to lead the industry shift towards increased sustainability based on intelligent solutions, by being a lifecycle partner for its customers and prioritizing safety in all its activities.
- The Future Company can unlock significant value for its stakeholders by being the lifecycle partner for its customers, solving the sustainability challenge through innovation, positioning itself well to grow in material flow and by creating and combining a team of top global talent.
- The Future Company initially aims to achieve a comparable operating profit in excess of 10 percent, supported by synergies expected to be approximately EUR 100 million annually that are expected to be achieved in full within 3 years from the completion.
- The proposed combination will be implemented as a statutory absorption merger whereby Konecranes will be merged into Cargotec. Prior to or in connection with the completion of the merger, Cargotec will issue new shares without payment to the shareholders of Cargotec in proportion to their existing shareholding by issuing two (2) new class A shares for each class A share and two (2) new class B shares for each class B share, including new shares to be issued to Cargotec for its treasury shares. Upon completion, Konecranes’ shareholders will receive as merger consideration 0.3611 new class A shares and 2.0834 new class B shares in Cargotec for each share they hold in Konecranes on the record date. This implies that Konecranes shareholders would own approximately 50 percent of the shares and votes of the Future Company, and Cargotec shareholders would own approximately 50 percent of the shares and votes of the Future Company. In addition to the merger consideration shares, all the existing class A shares of Cargotec will be listed on Nasdaq Helsinki in connection with the merger.
- Konecranes will propose to a general meeting of shareholders to be held before the completion of the merger to distribute an extra distribution of funds in connection with the transaction in the total amount of approximately EUR 158 million, corresponding to EUR 2.00 per share, to Konecranes’ shareholders before the combination is completed. The extra distribution of funds will be paid in addition to the ordinary distribution(s).
- With respect to ordinary distributions in 2021, the Boards of Directors of Konecranes and Cargotec will propose to their respective annual general meetings to be held in 2021 to effect a distribution of funds of up to EUR 70 million so that each company shall distribute an approximately equal amount before the combination is completed.
- Konecranes and Cargotec have obtained necessary commitments for the financing of the completion of the merger.
- The combination is subject to, among other items, approval by a majority of two-thirds of votes cast and shares represented at the respective EGMs of Konecranes and Cargotec, and the obtaining of merger control approvals. Completion is expected in the fourth quarter of 2021, subject to all conditions for completion being fulfilled.
- Shareholders representing approximately 44.8 percent of the shares and approximately 76.3 percent of the votes of Cargotec and shareholders representing approximately 27.4 percent of the shares and votes of Konecranes, have irrevocably undertaken to vote in favour of the combination.
- The combination is unanimously recommended by the Boards of Directors of Konecranes and Cargotec to their respective shareholders.
- The Board of Directors of the Future Company is proposed to include an equal number of Board members from both companies. It is proposed that the Future Company’s Chairman will be Christoph Vitzthum.
- The preliminary financial targets of the Future Company will be above-market sales growth, an initial comparable operating profit in excess of 10 percent, and gearing below 50 percent which can temporarily be higher.
Source: Konecranes
