Terex is to add to its portfolio of German subsidiaries by acquiring Atlas Weyhausen, the manufacturer of loader cranes and wheeled excavators, and the Schaeff Group, which makes scrap handlers and compact construction equipment.

Both deals have been agreed and are expected to conclude before the end of the year.

Atlas’s 2001 revenues are estimated at $180m, and Schaeff’s at $220m.

Terex executive vice president Fil Filipov will be responsible for restructuring both businesses. He has already been advising Atlas since July when US venture capitalists bought the company. At that time his son Steve Filipov was seconded from Terex to be chief executive of Atlas.

Fil Filipov said: ‘The process of lowering the costs of Atlas is well underway. The product quality is excellent and the cooperation we have received from the labour unions has been outstanding. We believe there are significant consolidation and sourcing opportunities among Schaeff, Atlas and the Terex Group generally. Specifically, we have identified about $41m of cost reduction initiatives, with about $24m already implemented at Atlas through our consulting assistance.’

Terex CEO Ron DeFeo said that the acquisitions would ‘provide distribution synergies between Atlas and Schaeff, as well as with other Terex products that are under-represented in Germany.’

He continued: ‘The acquisitions are an excellent fit with Terex’s strategy of diversifying both the products and geographic range of our customer offerings. The combination of Atlas and Schaeff will increase our penetration into Germany by adding approximately $250m in annual German revenues and 60 independent dealers in a market where today we have limited presence, while also adding new products to the Terex portfolio.’

Terex said that Atlas and Schaeff both add products that fill gaps in the Terex portfolio. Atlas competes primarily in two product categories: wheeled excavators from 11t to 20t and truck mounted articulated cranes. Schaeff competes primarily in four product categories: mini-excavators ranging from 1.5t to 5.5t, midi-excavators ranging from 6.5t to 11t, wheel loaders ranging from 50hp to 140hp, and scrap material handlers ranging from 20t to 65t.

The Schaeff acquisition was funded by a share swap. Terex has taken all the shares that the Schaeff family holds in Schaeff Group, and the Schaeff family in return has been given shares in the Terex Group, making it one of the largest Terex shareholders.