Cargotec and Konecranes announced an agreement to merge the companies in October 2020, creating a global business with €7bn turnover.

The Cargotec group includes Kalmar—a manufacturer of lifting equipment including ship-to-shore cranes, yard cranes straddle and shuttle carriers, and empty container handlers—and rope specialist MacGregor, which in 2019 introduced the first fibre rope offshore crane, called FibreTrac.

The proposed combination will be implemented as a statutory absorption merger whereby Konecranes will be merged into Cargotec. The future company’s name and location of the headquarters will be determined and announced at a later stage.

The new entity aims to raise current €565m operating profit by at least 10% and by €100m within three years.

Cargotec chairman, Ilkka Herlin, said: “Sustainability has been high on Cargotec’s agenda since its foundation and this merger enables us to become a global leader in sustainable material flow. Our customers are increasingly seeking green solutions and together we will have better opportunities to solve customers’ challenges. I believe this is an excellent value creation opportunity both from a business perspective and also shaping global trade for the better. The Future Company will be well-positioned to utilise these opportunities and create strong value for its customers, employees and shareholders.”

Konecranes chairman, Christoph Vitzthum, said: “The combination of Konecranes and Cargotec, with their iconic technology brands, innovation capabilities, talented people and focus on sustainability, will create a company that is clearly greater than the sum of its parts, delivering robust synergies and creating a unique platform for shareholder value creation. Customers will benefit from the companies’ combined technologies and even better service capabilities. This is a pivotal moment for Finnish industry and the material handling industry as a whole, and we are fully ready and committed to seize this historic opportunity.”

The proposed merger will create a global leader in sustainable material flow, with several customer-facing brands and complementary offerings across its businesses in industries, factories, ports, terminals, road and sea-cargo handling. Solving the sustainability challenge through innovation in automation, robotics, electrification and digitalization.

The combination of Cargotec and Konecranes is expected to unlock value for shareholders of the future company through complementary skills, increased R&D scale, global top talent, operational excellence, and synergies. The synergies are expected to be approximately €100m annually, and fully realised in the first three years from the completion.

Cargotec and Konecranes have approximately 29,400 employees across 50 countries. The future company’s broad service network comprised over 8,500 service employees serving customers from over 800 service locations from around the world. The industries served will include container handling, manufacturing, transportation, construction and engineering, paper and pulp, metals productions, mining, power, chemicals and marine industries.

“The companies continue to work closely with the competition authorities in the remaining jurisdictions to obtain regulatory approvals. Cargotec and Konecranes are confident that the approvals will be received to allow completion of the transaction by the end of H1/2022. Until completion, both companies will operate fully separately and independently,” it said in a statement.