Terex Divesting Atlas Heavy Construction Equipment

Equipment builder agrees to sell crawlers, wheel and rail excavators, knuckle-boom truck loader cranes, and material handlers

Terex Corp. has an agreement to divest its Terex Atlas heavy-construction equipment unit in Ganderkesee, Germany, and knuckle-boom crane and related components businesses, in Vechta and Delmenhorst, Germany. The buyer has not been named and the terms of the agreement have not been released.

The transaction is schedule to close in the second quarter of 2010.

Terex chairman and CEO Ron DeFeo called the agreement “another important step forward in the strategic repositioning of Terex.”

The announcement comes less than a month after Terex sold its mining equipment business to Bucyrus International Inc. for $1.3 billion in cash and Bucyrus stock.

“We acquired the Atlas business in 2001 with the intention of having a quality full-size excavator as part of a globally competitive portfolio of construction equipment,” DeFeo explained. “Our goal was to grow the regionally strong Atlas excavator product as part of this strategy, but we were, for various reasons, never able to achieve the product cost advantage required for it to be successful. Despite restructuring attempts, the tough economic conditions in 2009 resulted in an operating loss for this business in excess of $61 million on sales of approximately $194 million, with approximately two-thirds of the loss coming from the construction products.”

The new agreement also calls for Terex to sell its heavy-construction equipment sales and service business in Bradford, England, and Terex’s minority stake in the Atlas Chinese joint venture. Product lines being divested include crawlers, wheel and rail excavators, knuckle-boom truck loader cranes, and Terex Atlas-branded material handlers. The transaction also includes the Terex Atlas UK distribution business for truck loader cranes.

Terex compact excavators and compact wheel loaders, and the Terex Fuchs material handler line, both made in Germany; and Terex rigid and articulated trucks, backhoe-loaders, and other products manufactured in the U.K., will remain with the company.

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