Konecranes Oyj — M&A Activity 2022

Mar 29, 2022

The UK CMA blocks the merger between Konecranes and Cargotec and thus the Companies have Jointly Decided to Cancel the Planned Merger

The UK CMA blocks the merger between Konecranes and Cargotec and thus the Companies have Jointly Decided to Cancel the Planned Merger

KONECRANES PLC INSIDE INFORMATION March 29, 2022 at 9:55 am EEST

The UK CMA blocks the merger between Konecranes and Cargotec and thus the
Companies have Jointly Decided to Cancel the Planned Merger

The UK Competition & Markets Authority (“CMA”) has blocked the merger between
Konecranes and Cargotec. According to the CMA’s final report issued today, the
remedies - which would have removed all overlapping businesses of the two
companies and were accepted by the European Commission (“EC”) - would not be
effective in addressing the CMA’s concerns and thus the planned merger between
Konecranes and Cargotec cannot be completed. The completion of the planned
merger would have required approvals from all relevant competition authorities.
Thus, Konecranes and Cargotec have today decided to cancel the planned merger.

Konecranes and Cargotec have obtained clearances for the planned merger from
numerous competition authorities. As announced on February 24, 2022, the EC
conditionally approved the planned merger between Cargotec and Konecranes on the
basis of the same remedy package rejected by the CMA, which comprised
commitments to divest Konecranes Lift Truck business and Kalmar Automation
Solutions. In addition, the State Administration for Market Regulation (the
competition authority in China) and nine other jurisdictions have approved the
planned merger.

In addition to the clearances of the above competition authorities, completion
of the merger remained subject to further approvals from various other
competition authorities, including the Department of Justice (“DOJ”) in the
United States, with whom Cargotec and Konecranes have been in continuous
dialogue.

In response to feedback received from the CMA during the course of their
investigations, the boards of directors of Konecranes and Cargotec carefully
considered amending the remedy package offered to the EC further, as well as
offering alternative remedy packages to address the concerns raised by the CMA.
The boards of directors did not, however, find any satisfactory solution which
would have addressed the concerns of the CMA and which would have been in the
best interest of the shareholders of Konecranes and Cargotec, and of the
combined company, without jeopardising the rationale of the proposed merger as
presented on 1 October 2020.

As a consequence of the CMA’s negative final report, the boards of directors
Konecranes and Cargotec have therefore concluded that it is in the best interest
of each of Konecranes and Cargotec and their respective shareholders that the
merger is cancelled.

Christoph Vitzthum, the Chairman of Konecranes stated: The combination of
Konecranes and Cargotec, as planned and announced on 1 October 2020, would have
created a company that would have been greater than the sum of its parts. The
merger control process has been extensive and the investigations thorough, and
Konecranes Board of Directors is disappointed that the remedy package offered
did not satisfy the concerns of all regulators. At the same time, we believe
that further remedies would have not been in the best interest of Konecranes’
shareholders as they would have changed the strategic rationale of the
transaction.  Konecranes will continue to drive its strategy and pursue value
-creation potential on a stand-alone basis.

Ilkka Herlin, the Chairman of Cargotec stated: The Board of Cargotec is
convinced that the merger would have created substantial value for the entire
industry as well as shareholders by improving sustainable material flow. The
combination would have created a strong European company enabling accelerated
shared abilities to innovate without harming competition. We have done all we
could to realise the merger and are disappointed that our plans have had to be
abandoned. After a long and extensive regulatory review process and merger
planning preparations it is time to shift our full focus on executing Cargotec’s
own strategy and value-creation opportunities.

Konecranes and Cargotec will immediately cease the pursuit of the merger and the
related processes and continue to operate separately as fully independent
companies.

By the end of 2021, Konecranes had booked EUR 56 million and Cargotec EUR 57
million of merger related transaction and integration planning costs. The total
transaction cost estimate of EUR 125 million (excluding integration planning
costs) remains valid. The final transaction and integration planning costs will
be reported when available.

KONECRANES PLC
The Board of Directors

FURTHER INFORMATION
Kiira Fröberg,
Vice President, Investor Relations,
tel. +358 (0) 20 427 2050

Niina Suhonen,
Vice President, Group Marketing and Communications
tel. +358 (0) 40 843 9438

IMPORTANT NOTICE

The Merger and the merger consideration securities have not been and will not be
registered under the U.S. Securities Act of 1933 (the “Securities Act”), and may
not be offered, sold or delivered within or into the United States, except
pursuant to an applicable exemption of, or in a transaction not subject to, the
Securities Act.

The information in this release is not directed to, or intended for distribution
to or use by, any person or entity that is a citizen or resident of, or located
in, the United States or any other locality, state, country or other
jurisdiction where such distribution or use would be contrary to law or
regulation or which would require any registration or licensing within such
jurisdiction and it does not constitute an offer of or an invitation by or on
behalf of, Konecranes, or any other person, to purchase or sell any securities.

The information in this release contains forward-looking statements, which are
information on Konecranes’ current expectations and projections relating to its
financial condition, results of operations, plans, objectives, future
performance and business. These statements may include, without limitation, any
statements preceded by, followed by or including words such as “target,”
“believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,”
“project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other
words and terms of similar meaning or the negative thereof. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors beyond Konecranes’ control that could cause Konecranes’ actual results,
performance or achievements to be materially different from the expected
results, performance or achievements expressed or implied by such forward
-looking statements. Such forward-looking statements are based on numerous
assumptions regarding Konecranes’ present and future business strategies and the
environment in which it will operate in the future.

Konecranes is a world-leading group of Lifting Businesses™, serving a broad
range of customers, including manufacturing and process industries, shipyards,
ports and terminals. Konecranes provides productivity enhancing lifting
solutions as well as services for lifting equipment of all makes. In 2021, Group
sales totaled EUR 3.2 billion. The Group has around 16,600 employees in 50
countries. Konecranes shares are listed on the Nasdaq Helsinki (symbol: KCR).

DISTRIBUTION
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www.konecranes.com