Terex gets takeover bid from Zoomlion despite existing Konecranes deal

The chairman of Konecranes told local press that he thought the Zoomlion offer was unlikely to go through

Terex makes cranes and equipment for mines and builders (Getty Images)

A Chinese construction-manufacturing company has openly tried to buy out a US rival for the first time, despite the rival being part of an existing deal with Finland's Konecranes Oyj.

Terex shares soared on Tuesday after the offer from Zoomlion Heavy Industry Science and Technology Co., which valued the maker of cranes and equipment for mines and builders at $3.28 billion.

Shares shot up by as much as 60 per cent to $23.98 in afternoon trading, still below Zoomlion's offer of $30 per share. The previous offer from Konecranes reportedly valued Terex shares at around $18.

(Google Finance)

Terex said it was considering the proposal and would comment after the board had completed its review.

Bloomberg was first to report that Terex had received the offer from China's Zoomlion, but that it had rejected it to concentrate on the planned merger with Finland's Konecranes Oyj.

After the story broke, the chairman of Konecranes told local press that he thought the Zoomlion offer was unlikely to go through.

"We have a deal with Terex, and that can't be terminated just like that,” Stig Gustavson, Konecranes chairman, said.

The Konecranes merger was agreed in August 2015 in the hope that a combined $10 billion annual revenue would help the two companies weather a climate of reduced demand.

Terex has struggled to bounce back after the 2008 recession hit skyscraper construction and infrastructure projects.

Meanwhile Chinese firms, which produce the cheaper equipment, struggle to sell their products in the US because companies don’t like to use a brand they are unfamiliar with, analysts have said.

Konecranes did not respond to requests for comment and Zoomlion could not be reached outside regular business hours.

Additional reporting by Reuters