U.S. crane maker Terex Corp has told Chinese peer Zoomlion to sweeten its $3.3-billion offer in order for it to abandon its merger agreement with Finland's Konecranes, according to people familiar with the matter.
Terex's response shows that Zoomlion has made little progress toward a deal since its offer was disclosed publicly by Terex a month ago. Terex said on Feb. 17 that it was continuing to review Zoomlion's proposal to determine the course of action that is in the best interest of its shareholders, and that this process would take time.
The latest development also illustrates that Zoomlion's main stumbling block in its negotiations with Terex is price, rather than concerns that the United States could block the deal because of Terex's ties to the U.S. military and presence in U.S. ports.
Terex has argued privately that the synergies with Konecranes in the material handling and port systems businesses of the two companies mean that Terex is worth more than the $30 per share in cash that Zoomlion has offered, the people said on Wednesday.
Terex has not communicated to Zoomlion the exact price it would need to justify breaking up its merger agreement with Konecranes, though discussions are continuing, the people said. Zoomlion has not shown any willingness so far to raise its offer, the people added.
The sources asked not to be identified because the discussions are confidential. Terex and Zoomlion declined to comment, while a Konecranes representative did not immediately respond to a request for comment.
The battle for Terex comes as the market for cranes continues to struggle with weak demand, driven by low oil and gas prices and foreign exchange volatility.
