Lawmakers Urge Rigorous Scrutiny of Proposed Terex Deal
China’s Zoomlion Heavy Industry Science & Technology Co. has filed for regulatory approval of its unsolicited bid to acquire Connecticut-based crane and construction machinery maker, Terex Corp.
The bid has drawn scrutiny from U.S. lawmakers who are calling on the U.S. Treasury Department to conduct a “rigorous national security review” of the potential deal.
The Treasury Department oversees the Commission on Foreign Investment in the United States (CFIUS), the inter-agency board that reviews mergers and investments by foreign firms that have potential national security implications.
Republican Representatives Duncan Hunter of California, Michael Rogers of Alabama and Walter Jones of North Carolina have written to U.S. Treasury Secretary Jack Lew urging that CFIUS carefully review the prospective deal because of Terex’s numerous defense contracts.
“I strongly caution you to apply robust scrutiny to any possible Chinese takeover of an American company that supplies resources to our service members,” wrote Jones in a recent letter to Lew. Jones and Hunter both serve on the House of Representatives Armed Services Committee.
Before the Zoomlion offer, Terex had agreed to merge with Konecranes, the Finnish international heavy equipment manufacturer, to create a crane and materials handling supplier with a combined $10 billion in sales.
After the merger, the company had said it would change its name into Konecranes Terex Plc and be headquartered in both the U.S. and Finland.
Recently, Terex urged Zoomlion to sweeten its $3.3 billion offer, but did not disclose how much higher the Chinese company would need to bid to finalize a deal.
Terex issued a statement saying that it is “carefully reviewing” the Zoomlion offer “to determine what course of action is in the best interests” of its shareholders.
Zoomlion is the first mainland construction machinery company to be listed on both the Shanghai and Hong Kong stock exchanges.
The company manufactures high-tech equipment for the agricultural, construction, energy, environmental and transportation sectors with facilities in Italy, Germany, Italy and Brazil.