Conexpo 2002 opened with the sensational news that Manitowoc Company Inc is to buy Grove Worldwide for $270m.
The deal was announced on Monday 18 March and confirmed by Manitowoc CEO Terry Growcock at a Manitowoc customer dinner at the Bellagio Hotel in Las Vegas, USA, and immediately became the main crane industry talking point at the Conexpo show which opened the following day.
‘We are truly excited by this opportunity,’ Growcock said.
The deal, which is still subject to regulatory approval, is expected to take 45 to 90 days to close, Growcock said.
The big issue is whether regulators will sanction Manitowoc’s acquisition of Grove’s National Crane division, or whether it will be deemed that the two companies would together have too great a share of the North American boom truck market. A swift sale of National – and there would be no shortage of bidders for what is the clear market leader in its segment – would help Manitowoc’s balance sheet.
The deal is structured so as not to increase Manitowoc’s gearing. Under the deal, the 25 banks and institutions that own Grove will be given shares in Manitowoc in exchange. Collectively their shareholding will amount to about 10% of Manitowoc Company Inc. This way Manitowoc does not have to extend its borrowings, already stretched after paying $300m for French tower crane manufacturer Potain just last year.
The combination of Manitowoc (crawlers, boom trucks), Potain (tower cranes) and Grove (telescopic rough terrains, all terrains, truck cranes and aerial work platforms) makes a comprehensive product range rivaled only by Terex. On takeover, the group will have a range of 1,000 models, Growcock said. It will also have 5,000 employees worldwide, although a headcount reduction at Grove must be expected, even though it has already cut its numbers significantly since the mid 1990s when it was owned by Hanson.
There is also considerable overlap in the distribution networks between Manitowoc and Grove, not just in North America, where they share several of the biggest dealers, but also in Asia, where Manitowoc is actually the Grove distributor since assimilating Coastal Equipment last year. And in Germany, Stirnimann Ag is a distributor for both Potain and Grove.
