Terex (TEX) To Sell German Construction Equipment Business

Terex Corporation (NYSE:TEX) has agreed to sell its German compact construction business to Yanmar Holdings Co., Ltd. for $60 million in order to focus on its product portfolio.

Terex’s German compact construction business manufactures and sells midi/mini excavators, wheeled excavators and compact wheel loaders. The transaction also includes the manufacturing facility located in Crailsheim, Germany and the parts distribution center located in Rothenburg, Germany.

The sale of German compact construction business is subject to government regulatory approvals and other customary closing conditions. Terex expects the deal to close in the second half of 2016.

Moreover, the company is currently analyzing its global manufacturing, distribution and office footprint. It is evaluating businesses that have not delivered an appropriate return and plans to take appropriate actions to improve margins or make strategic portfolio decisions.

Terex also announced that the sale of its Material Handling & Port Solutions (MHPS) segment to the Finnish company, Konecranes will proceed for roughly $1.3 billion. The sale, which is expected to close in Jan 2017, is subject to customary regulatory approvals and the approval of Konecranes' shareholders.

Furthermore, Terex will benefit from its cost-saving initiatives and product development. The company is evaluating its cost structure and executing plans to cut approximately $60 million in annual costs. The company expects to realize about 40% of the savings in 2016.

Terex currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industrial products sector include Astec industries Inc. (NASDAQ:ASTE) , H&E Equipment Services Inc. (NASDAQ:HEES) and Belden Inc. (NYSE:BDC) . While Astec sports a Zacks Rank #1 (Strong Buy), H&E Equipment Services and Belden Inc. carry a Zacks Rank #2 (Buy).