Konecranes has signed an agreement to buy Indian crane company WMI Cranes Ltd in a deal that could be worth more than USD80 million.
WMI, owned by its managing director Gopal Vazirani and his family, is one of India's leading heavy-duty crane manufacturers. It has an installed base of more than 4,000 cranes in India and an extensive sales network in the country.
The company has two production plants, one in Mumbai and one in Jejuri, near Pune. WMI's cranes are used in the steel, engineering, general manufacturing, cement, energy, shipyard and logistics industries.
For the year ended 31 March 2010, WMI's net sales totalled EUR30 million (USD41.9 million). It employs about 350 people and has a contracted workforce of about 600 people.
According to the agreement, Konecranes will acquire 51% of WMI's shares for INR1.69 billion (USD38.2 million). It will then buy the remaining shares one year later. The sellers are entitled to a performance-linked part of the purchase price and the total maximum price for all WMI's shares can amount to about INR3.6 billion (USD81.3 million).
Konecranes CEO Pekka Lundmark says the acquisition will significantly boost the company's presence in the fast-growing Indian crane market. "Our aim is to further grow the business potential by extending the offering with technologies developed by Konecranes. The product offerings of the two companies complement each other very well."
Vazirani says customers will benefit from the combined products, technology and service of both companies.
Separately, Konecranes Plc confirmed it has approached German-based industrial and ports crane manufacturer Demag Cranes to discuss a possible merger of the two companies.
The Finnish manufacturer released a statement last Friday to silence media speculation about the two companies. It says it approached Demag Cranes on 8 September.
"This was a preliminary approach and the management of Demag Cranes has responded that [it] has no interest in engaging in any dialogue regarding such a potential combination. To date there have been no concrete negotiations between the two companies," the statement says.
Konecranes believes there is a need for consolidation in the crane industry, particularly in Europe. It says it is "continuously evaluating" its strategic options for mergers and acquisitions.