The company has signed a memorandum of understanding with R. Stahl Technology Group to acquire its material handling division, R. Stahl Foerdertechnik. In 2004 Foerdertechnik generated Euro 113m of sales. It employs about 750 people in Germany.

The intended purchase price was not disclosed.

According to KCI Konecranes, the two companies would work well together: “The activities of KCI Konecranes and R.Stahl Foerdertechnik have a good strategic fit. The products and market segments are highly complementary, with only limited overlap. The planned acquisition would provide important synergies and the access to a large global installed base, ” said KCI Konecranes President and CEO Pekka Lundmark.

The deal includes all of Foerdertechnik’s international subsidiaries, including France, Italy, the Netherlands, Portugal, Spain, the UK, the UAE, Singapore, the USA, Chile and Uruguay.

Over the past three years, R Stahl has focused on its engineered and explosion-proof crane and hoist applications.

“The intention is to have Foerdertechnik become the missing puzzle piece for KCI Konecranes’ programme. They are strong in standard cranes and in harbour cranes, and we are strong in specials,” said R Stahl Technology Group president and CEO Martin Schomaker.

“In my understanding, when Stahl is written on it, Stahl is in it. Although the Stahl brand could be used for products it is selling,” Schomaker said.

“This for us is a very important issue for the decision. Foerdertechnik’s future is the same as its past: the same management, the same sales force, nothing changes, it is just a matter of the holding company.”

The company said that the deal was in the best interests of Foerdertechnik: “United with KCI Konecranes, R. Stahl Foerdertechnik will be able to assume an even better position medium to long term in a highly competitive market than it would be possible as part of the R. Stahl Technology Group,” the Group said in a press release.

“In this regard, the management board feels responsible, as in the past, to the company’s employees,” R. Stahl said. “It is important for the management, in connection with the negotiations with KCI Konecranes, to secure that the operations of the Material Handling division will be continued at KCI Konecranes substantially in the manner as before.

The sale is complicated by a 2004 agreement with metalworkers’ union I G Metall, that offered productivity improvements in exchange for delaying staffing level reviews until the end of 2006. Foerdertechnik employs about 750 people in a hoist and crane components factory in Kuenzelsau and a crane factory in Ettlingen. Both locations will be rented for at least five years, Schomaker said.

Pekka Lundmark said that the deal would also offer the company greater access to Europe’s biggest crane market, Germany. “Germany has higher sales for current operations, but importantly, regardless where German industries operate, they will continue to be a major buyer of factory cranes.”

KCI Konecranes said that an agreement would be signed by the end of November, should the negotiations prove a success. The transaction would close by the end of the year, it said, provided that merger control authorities clear the deal.

* KCI Konecranes has also cemented its relationships with two eastern European crane manufacturing firms. It has bought a majority shareholding of Ukraine’s Zaporozhcrane for Euro 3m. It has also signed a long-term contract with Poland structural steel fabricator Mostosal Chojnice.

The Polish agreement “is in line with our general strategy of improving flexibility in capacity utilisation by building up a network of certified manufacturing partners,” said Mikko Uhari, KCI Konecranes special cranes president. “We have modular product platforms that allow us to manufacture either in our own or partners’ facilities depending on the actual market situation. The agreement also enables us to continue serving the European market in an efficient way.”

Mostosal will take over most of the crane production of Konecranes Schwerlastkrane’s Berlin factory, which is scheduled to close.

Both agreements centre mainly on heavy-duty special cranes.

Co-operation with Mostostal Chojnice started with the manufacture of bridge structures and assembly work using KCI Konecranes key technology, components and designs. The Mostostal Chojnice factory is close to Gdynia Port and the German border.

Zaporozhcrane, has been privately held since 1994 and manufactures industrial and harbour cranes for the Russian and Ukrainian markets.

“KCI Konecranes sees great potential in Zaporozhcrane”, said Seppo Hoppu, KCI Konecranes’ Eastern Europe director. “This deal will strengthen our position in the fast growing markets in Ukraine and Russia. Additionally, we will get a very competitive manufacturing site for global markets.”