Cargotec mulls separation of core businesses

Cargotec mulls separation of core businesses

Cargotec Corporation is considering separating its core businesses, Kalmar and Hiab, into two standalone companies, according to a recent announcement.

The company’s Board of Directors believes that this move could unlock shareholder value and allow both businesses to pursue sustainable profitable growth opportunities independently.

The proposed plan would involve separating Kalmar as a new listed company through a partial demerger from Cargotec.

The Board of Directors estimates that the separation of Kalmar and Hiab could improve their business performance through higher agility, decisiveness, and stronger management focus.

The plan is expected to be carried out during 2023, and if executed, Kalmar would be listed on Nasdaq Helsinki in 2024.

READ: Kalmar to deliver first heavy electric forklift to Innofreight

“Kalmar and Hiab serve different customers and have limited cross-selling synergies,” said Cargotec’s President and CEO, Casimir Lindholm.

“Both businesses have ambitious growth plans, and we are now assessing if those would be better served as separate standalone businesses.”

Lindholm added that Hiab has a proven track record of profitable growth and M&A, while Kalmar is a technology forerunner in container handling and heavy logistics with strong market positions.

The separation of Kalmar and Hiab would be a logical next step in Cargotec’s previously announced aim to increase the independence of its businesses.

The company has already announced that MacGregor, which is currently one of its three business areas, will not be part of its portfolio in the future, and it will continue to look for a solution for MacGregor during 2024.

READ: MacGregor’s new electric transloading crane completes their electric crane series

If the planned actions are completed, there would be three separate businesses, Kalmar, Hiab, and MacGregor.

The Board of Directors believes that the planned separation would improve the governance and simplify the structures of the separate entities, providing greater transparency and accountability.

“The separation of Kalmar and Hiab would be the logical next step in the growth journey,” added Cargotec’s Chair of Board, Jaakko Eskola.

“The Board is convinced that the separation would unlock shareholder value by allowing both businesses to pursue sustainable profitable growth opportunities independently.”

The Board of Directors will continue assessing the possibilities of separating Kalmar and Hiab and will only recommend the planned transaction if they determine that enhanced shareholder value can be attained.

Cargotec recently announced the appointment of Casimir Lindholm as its new President and CEO, effective 1 April.

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