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Finland's Konecranes buys out Asia venture partner for $162 million

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By Reuters
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(Reuters) – Finnish industrial crane maker Konecranes <KCRA.HE> has agreed to buy the outstanding 50% stake in its MHE-Demag joint venture in southeast Asia from partner Jebsen & Jessen for 147 million euros (126.3 million pounds), it said on Thursday.

Konecranes said the deal would add about 150 million-180 million euros in annual group sales and about 25 million-30 million euros in annual earnings before interest, tax and amortisation (EBITA) by 2022.

MHE-Demag, which has 1,800 employees, operates in Australia, Indonesia, Malaysia, Singapore, the Philippines, Taiwan, Thailand and Vietnam.

“The acquisition will significantly improve Konecranes’ market position in the fast-growing Southeast Asian markets, creating further opportunities for service sales and simplifying the distribution channel for industrial cranes and components,” Konecranes said.

Konecranes, the main supplier to the venture, said that after the deal Asia-Pacific would make up about 20% of group sales.

The Finnish company said it was using 140 million euros in long-term funding, taken in the fourth quarter, to finance the cash consideration in the acquisition.

Shares in Konecranes rose 2.2% in morning trades.

(Reporting by Tarmo Virki; Editing by Jan Harvey and Edmund Blair)