Cargotec Corporation (HLSE:CGCBV) signed a combination agreement to acquire Konecranes Plc (HLSE:KCR) from a group of shareholders for €5.7 billion on October 1, 2020. Under the terms, Konecranes' shareholders will receive as merger consideration of 0.3611 new Class A shares and 2.0834 new Class B shares in Cargotec for each share held in Konecranes as on the record date. Cargotec will issue 28.5 million class A and 164.9 million class B shares as consideration. Post-completion, Konecranes shareholders would own approximately 50% of the shares of the combined company, and Cargotec shareholders would own approximately 50% of the shares combined company. Solidium Oy will own 4.3% stake in combined entity. In addition to the merger consideration shares, all the existing Class A shares of Cargotec will be listed on Nasdaq Helsinki in connection with the merger. Cargotec and Konecranes have obtained necessary commitments for the financing of the completion of the merger. To support and finance the completion of the merger, Cargotec and Konecranes have entered into re- and back-up financing agreements with Nordea Bank Abp. The merger financing arrangements comprise a €400 million term loan facility for Cargotec and €935 million term loan facilities for Konecranes exclusively arranged and underwritten by Nordea. As on January 28, 2021, Cargotec has closed the syndication regarding an €300 million Term Loan Facility. The facilities may be used to refinance the companies' existing indebtedness in connection with the merger, potential cash redemptions of Konecranes' shares as well as Konecranes' extra distribution proposed to be distributed prior to the completion of the merger. The proposed combination will be implemented as a statutory absorption merger whereby Konecranes will be merged into Cargotec. The agreement may be terminated by mutual written consent duly authorized by the Board of Directors of Cargotec and Konecranes. In the event, the agreement is terminated due to certain reasons specified in the agreement, the parties have agreed on the payment of a break-up fee and cost coverage of an agreed amount. The Boards of Directors of Cargotec and Konecranes have agreed to select Mika Vehviläinen as the president and ceo of the Future company. The appointment of Mika Vehviläinen will become effective upon completion of the transaction.

The combined company will include four Directors from the current Board of Directors of Konecranes i.e., Christoph Vitzthum, Janina Kugel, Ulf Liljedahl and Niko Mokkila and four Directors from the current Board of Directors of Cargotec i.e., Tapio Hakakari, Ilkka Herlin, Kaisa Olkkonen and Teuvo Salminen. Christoph Vitzthum has been proposed as a Chairman of combined company. All the employees of Konecranes shall be transferred to Cargotec in connection with the execution of the merger by the operation of the law.

The transaction is subject to, among other items, approval by a two-third majority of shareholders at the respective EGMs of Cargotec and Konecranes which are expected to be held in December 2020, the obtaining of merger control approvals, availability of financing agreed for the purpose of merger, approval from regulatory and competition authorities, listing of consideration shares on stock exchange and approval from creditors. Cargotec shareholders holding approximately 44.8% of shares and Konecranes shareholders holding approximately 27.4% shares have undertaken to vote in favor of transaction. The transaction is unanimously recommended by the Boards of Directors of both Cargotec and Konecranes to their respective shareholders. As on December 3, 2020, transaction is approved by the Finnish Financial Supervisory Authority. As on December 18, 2020, transaction is approved by shareholders at Extraordinary General Meetings of Konecranes Plc, Cargotec Corporation other conditions to completion having been fulfilled Actual completion date may be earlier or later than January 1, 2022. As of May 28, 2021, the transaction has been submitted to CMA for investigation. As of July 2, 2021, the European Commission commences Phase II review of the merger. As of July 22, 2021, the European Commission suspended the previously set deadline of November 10, 2021. As of August 10, 2021, Cargotec and Konecranes have received unconditional approval from the State Administration for Market Regulation. The companies continue to work closely with the competition authorities in the remaining jurisdictions to obtain regulatory approvals. The completion of the transaction is expected in the fourth quarter of 2021. As of September 27, 2021, The Federal Antimonopoly Service of Russia has extended the deadline till November 22, 2021 for considering the application of Cargotec Corporation for the acquisition of rights that allow determining the conditions for conducting business activities of Konecrains. As announced on November 2, 2020, the transaction is expected to be completed by January 1, 2022. As of July 2, 2021, transaction is expected to be completed by the end of first half of 2022. As on November 26, 2021, CMA provisionally concludes that the transaction may result in a significant reduction in competition in a number of product markets. Konecranes and Cargotec do not agree with the CMA's provisional conclusions. They will consider the content of the CMA's initial comments and continue to collaborate with the CMA. Konecranes and Cargotec continue the dialogue and cooperation with other relevant competition authorities, including the European Commission and the US Department of Justice, and are considering ways to address some of the issues raised by the various competition authorities. Konecranes and Cargotec remain convinced that the merger will be completed by the end of H1 2022. As on December 9, 2021, Cargotec and Konecranes have today submitted a remedy package to the European Commission comprising a commitment to divest Konecranes' Lift Truck business and Cargotec's Kalmar Automation Solutions. The proposed divestitures would eliminate overlaps between the parties' Container Handling Equipment businesses but allow the combined company to combine others and continue to be a strong player in all aspects in Container Handling Equipment. Cargotec and Konecranes understand that the EC will now examine the proposed remedy package and may conduct a customary market testing. As of February 24, 2022, the European Commission conditionally approved the transaction and completion remains subject to further feedback and approvals from various other competition authorities. As of August 5, 2021, the transaction is expected to close in first half of 2022.

Advium Corporate Finance provided fairness opinion and acted as the financial advisor; Mertzi Kivela, Anna Maarit Laurila, Jussi Nieminen, Jan Orndahl, Pauliina Tenhunen, Teresa Kauppila, Samuli Tarkiainen, Heidi Malmberg, Tero Tuomisto, Mariella Bade-Landel, Tomi Kemppainen, Suvi Kettunen and Andreas Slotte of Castrén & Snellman and Freshfields Bruckhaus Deringer LLP acted as the legal advisors to Cargotec. J.P. Morgan Securities plc provided fairness opinion and also acted as financial advisor to Konecranes. Access Partners Oy acted as the financial advisor and Mikko Heinonen, Sonja Siggberg, Outi Raitasuo, Peter Forsberg, Mikko Huimala, Markus Bremer, Johanna Haltia-Tapio, Maria Wasastjerna, Mattias Friberg of Heikki Vesikansa, Hannes Snellman Attorneys Ltd and Scott Simpson, Lorenzo Corte, Fred Depoortere of Skadden, Arps, Slate, Meagher & Flom LLP acted as the legal advisors to Konecranes. Petteri Änkilä and Alexandra Therman-Londen of Nordea Bank Abp acted as the financial advisor to Cargotec on certain matters. Citigroup Global Markets Limited acted as financial advisor to Cargotec Corporation. Mårten Knuts, Lennart Simonsen and Paul Raade of Krogerus acted as legal advisors for Hartwall Capital. Dittmar & Indrenius Attorneys Ltd. acted as legal advisor for Solidium.