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Konecranes and Cargotec to merge

Konecranes and Cargotec’s board of directors signed a combination agreement and a merger plan to combine the two companies.

The proposed combination will be implemented as a statutory absorption merger whereby Konecranes will be merged into Cargotec. Prior to or in connection with the completion of the merger, Cargotec will issue new shares without payment to the shareholders of Cargotec in proportion to their existing shareholding by issuing two new class A shares for each class A share and two new class B shares for each class B share, including new shares to be issued to Cargotec for its treasury shares.

Upon completion, Konecranes’ shareholders will receive as merger consideration 0.3611 new class A shares and 2.0834 new class B shares in Cargotec for each share they hold in Konecranes on the record date. This implies that Konecranes shareholders would own approximately 50 per cent of the shares and votes of the future company, and Cargotec shareholders would own approximately 50 per cent of the shares and votes of the future company. In addition to the merger consideration shares, all the existing class A shares of Cargotec will be listed on Nasdaq Helsinki in connection with the merger.

• Konecranes will propose to a general meeting of shareholders to be held before the completion of the merger to distribute an extra distribution of funds in connection with the transaction in the total amount of approximately EUR 158 million, corresponding to EUR 2.00 per share, to Konecranes’ shareholders before the combination is completed. The extra distribution of funds will be paid in addition to the ordinary distribution.
• With respect to ordinary distributions in 2021, the boards of directors of Konecranes and Cargotec will propose to their respective annual general meetings to be held in 2021 to effect a distribution of funds of up to EUR 70 million so that each company shall distribute an approximately equal amount before the combination is completed.
• Konecranes and Cargotec have obtained necessary commitments for the financing of the completion of the merger.
• The combination is subject to, among other items, approval by a majority of two-thirds of votes cast and shares represented at the respective EGMs of Konecranes and Cargotec, and the obtaining of merger control approvals. Completion is expected in the fourth quarter of 2021, subject to all conditions for completion being fulfilled.
• Shareholders representing approximately 44.8 percent of the shares and approximately 76.3 percent of the votes of Cargotec and shareholders representing approximately 27.4 percent of the shares and votes of Konecranes, have irrevocably undertaken to vote in favour of the combination.
• The combination is unanimously recommended by the boards of directors of Konecranes and Cargotec to their respective shareholders.
• The board of directors of the future company is proposed to include an equal number of Board members from both companies. It is proposed that the Future Company’s Chairman will be Christoph Vitzthum.
• The preliminary financial targets of the future company will be above-market sales growth, an initial comparable operating profit in excess of 10 per cent, and gearing below 50 per cent which can temporarily be higher.

“The future company will be a global leader with its unparalleled product range, global service network, industry-leading intelligent technology and an unwavering commitment to safety,” said Konecranes CEO Rob Smith. “Supporting this will be top talent from both Konecranes and Cargotec and a passion to lead in sustainable material flow to deliver the very best for our customers. The timing is right, and the logic and fit of this combination are compelling. Konecranes looks forward to starting this journey together with Cargotec.”

Cargotec CEO Mika Vehviläinen commented also.

“The future company will have enhanced opportunities to improve the efficiency in customers’ operations and shape the whole industry forward to a more sustainable and intelligent one. Together we are stronger and our combined R&D resources will enable us to accelerate innovation in automation, robotics, electrification and digitalization. Both companies have broad service networks and together we can offer our customers superior value through our world-class service platform and intelligent technology,” the CEO said.

Rationale of merger

1. 1. Unlocking value together by capturing synergies and developing the operational excellence and innovation built into the DNA of the future company.
   2. Being the lifecycle partner for our customers with a broad service network in the industry, a world-class lifecycle services platform, and intelligent service technology enabling faster growth in the installed base, third-party equipment and innovative new offerings.
   3. Solving the sustainability challenge through innovation in automation, robotics, electrification and digitalization.
   4. Positioning us well to grow in material flow through a strong foundation built on the current core offering and increased R&D scale.
   5. Creating and combining a team of top global talent by being the preferred choice in the industry based on the strong purpose, global footprint and multitude of individual growth opportunities.

For the full release, visit konecranes.com.