Konecranes chairman Stig Gustavson

Terex is reportedly continuing discussions with China's Zoomlion, despite concerns any deal could be blocked by the Committee on Foreign Investment in the United States (CFIUS), according to a report from Reuters.

CFIUS, set up by the US government to scrutinise deals that could pose national security threats, has been increasingly flexing its muscle amid intensifying Chinese interest in foreign investments. Earlier this month, it forced Philips to scrap a USD3.3. billion sale of its lighting business to a consortium backed by Chinese investors, the agency notes.

Terex, a Westport, Connecticut-based crane maker, has 97 so-called priority-rated contracts with the US government that could attract CFIUS scrutiny. It also provides mobile harbour cranes in ports that are seen as a critical part of U.S. infrastructure.

While Terex's board has yet to decide on whether it should abandon an agreed sale to Finland's Konecranes in favour of Zoomlion's USD3.3 billion unsolicited proposal, it is not treating CFIUS as an issue that would preclude any deal with Zoomlion, according to the report.

As reported last week, Zoomlion has offered USD30 per share in cash for Terex, versus the 0.8 Konecranes shares for each Terex share that its shareholders stand to receive as a result of the deal that was agreed in August.

Should Terex back out of its deal with Konecranes, it will have to pay the Finnish company a USD37 million termination fee.

Meanwhile, Konecranes plans to push ahead with a deal with Terex.

A company statement says Konecranes continues to be convinced that the merger? represents a highly compelling opportunity for both companies and their shareholders, and stands behind and remains committed to the merger.

"We believe that the stock market undervalues the inherent value-creation potential of the merger. The merged entity, to be called Konecranes Terex Plc, is expected to deliver significant profitability upside based on expected market growth, ongoing internal profitability improvement initiatives and synergies resulting from the merger.

"The combined company will also have a solid capital structure and the ability to generate strong cash flow and shareholder returns through dividends and share repurchases," the statement explains.