Business

Uncertainty at Terex as materials handling firm is targeted for take-over

These appear uncertain times for Terex
These appear uncertain times for Terex These appear uncertain times for Terex

UNCERTAINTY hangs over the future of hundreds of staff at Co Tyrone screening giant Terex as the company's parent firm prepares to fend off a possible hostile takeover bid.

And it comes amid a downturn in the market for its global construction, quarrying and mining customers, which has led to profits at Terex halving in the last year.

Terex GB Ltd, which manufactures a range of mobile materials processing equipment under its Powerscreen and Terex Finlay brands at factories in Dungannon and Omagh, employs more than 1,000 workers.

The company also directly supports several hundred additional manufacturing jobs in Northern Ireland through its extensive local supply chain.

Its parent company is the New York Stock Exchange-listed US multinational Terex Corporation, which has confirmed that it has received an unsolicited, non-binding acquisition proposal from Zoomlion to wholly acquire it for a sum of around $3.3 billion (£2.3bn).

Zoomlion is China's second largest construction equipment manufacturer - often referred to as the 'Chinese Caterpillar' - and is eager to expand its international presence as China's market shrinks with the country's slowing economy.

Its offer to the Terex Corporation is the first time a Chinese construction company has openly tried to buy a US counterpart.

And because Zoomlion is partially owned by China's Hunan province, the Committee on Foreign Investment in the United States (CFIUS), a government agency that looks at deals that could pose potential security threats, has demonstrated concern regarding Chinese investments.

Because Terex has priority-rated contracts with the US government, an acquisition from a Chinese company could invite attention, as could the fact that Terex manufactures mobile cranes used in ports that are viewed as a critical part of US infrastructure.

Locally, Terex makes mobile crushing and screening equipment and is part of a Northern Ireland cluster that satisfies almost half of the world's demand for such machinery.

Plant made in Co Tyrone is sold to customers worldwide for applications as diverse as iron ore mining in India, road construction in Peru, diamond exploration in South Africa and sand washing in the Arabian Gulf.

But that market has been gradually diminishing in the last year or more, and allied to the emerging possibility of a takeover, it is leading to a period of uncertainly at Terex's local operations.

It will also be of concern to Invest NI, which has poured millions of pounds into the company down the years.

Just over two years ago, the taxpayer-funded agency offered £2.6m of support as part of a £21.7m investment by Terex Corporation to create 260 additional jobs by 2017 and bolster the company's research and development capacity.

The then Enterprise Minister Arlene Foster said: "Terex GB is one of Northern Ireland's top engineering companies and its decision to expand is a boost for Northern Ireland's vibrant materials handling sector. It also acknowledges the value which the Terex Corporation places on the skilled and educated workforce available here."