Konecranes Plc and Terex Corporation will combine their businesses in a merger of equals. The combined company, to be called Konecranes Terex Plc, will be a leading global lifting and materials handling solutions company with estimated combined 2014 revenues and EBITDA of EUR7.5 billion (USD10 billion) and EUR636 million (USD845 million), respectively.

Terex has declined 22% so far this year, leaving the Westport, Connecticut-based company with a market value of USD2.37 billion. Konecranes, based in Hyvinkaa, Finland, has meanwhile climbed 17% in the same period for a market value of EUR1.77 billion (USD1.95 billion).

Terex, which had 2014 revenue of USD7.3 billion and net income of USD319 million, makes heavy equipment for industries including construction, mining, shipping and refining. The company bought Demag Cranes AG of Germany in 2011 after raising its offer to win over management, according to the report. Demag had also attracted an approach from Konecranes.

Konecranes, which serves manufacturing and process industries, shipyards, ports and terminals, had revenue of about EUR2 billion (USD2.2 billion) and net income of EUR74.4 million (USD 82.16 million) in 2014.

Under the agreement, Terex shareholders will receive 0.80 Konecranes shares for each existing Terex share. Upon closing of the transaction, based on current fully diluted shares outstanding, Terex shareholders will own approximately 60% and Konecranes shareholders will own approximately 40% of the combined company.

The combined company will be listed on both Nasdaq Helsinki and the New York Stock Exchange.

According to the merger announcement, the combination will bring together complementary leaders in lifting, materials handling, and equipment servicing solutions. Konecranes Terex will be parent to a family of leading brands with global leadership positions in the industrial lifting, port solutions, aerial work platforms, materials processing and cranes categories. The combined company will be able to offer comprehensive solutions to customers worldwide based on a highly complementary product portfolio.

Konecranes Terex will have the critical scale to continue to drive technology innovation and provide customers with an industry-leading service offering. The combined company is expected to create enhanced shareholder value through increased global scale with enhanced ability to remain competitive; a broader presence in key sectors; creation of a global service organisation of critical mass and scope; a more robust portfolio of complementary products and customer solutions; significant operational and financial synergies; and strong balance sheet and cash flow generation to support growth and return of capital to shareholders.

Stig Gustavson, chairman of the board of Konecranes, says the combination of Konecranes and Terex is "a defining step in the history of both companies".

"With a focus on lifting and material handling solutions, Konecranes Terex will be in an excellent position to deliver enhanced growth in revenues and margins through several strategic advantages, including significant cross-selling opportunities. There is a common culture between the two organisations, with both companies having long histories of designing competitive and innovative solutions."

The sentiments are echoed by Terex CEO Ron DeFeo: "This merger brings together two great businesses and, through synergies, provides another lever that is within our control to deliver value-creation to both the shareholders of Terex and Konecranes. We have a deep respect for Konecranes and look forward to joining forces with them to build a stronger and more diverse company that will be in an excellent position to succeed in a dynamic and highly competitive global industry."

The combined company will maintain headquarters in Hyvinkää, Finland and Westport, Connecticut, USA.

Following closing of the transaction, the combined entity is expected to have approximately 32,000 employees worldwide.

The transaction is subject to approval by both Terex and Konecranes shareholders, regulatory approvals and other closing conditions. Konecranes and Terex expect to convene general meetings of their shareholders to approve the transaction in early 2016. Closing of the transaction is expected to occur during the first half of 2016.