Cargotec announces merger

Finland-based load handling specialist, Cargotec, is merging with another business to lead the way in sustainable material flow.

The merger between Cargotec and Konecranes will create a ‘Future Company’ and is expected to occur by the end of the first half of 2022.

“The planned high-level operating model of the Future Company is the result of months of integration planning work and the benchmarking of best practices across various industries, and the selection of the planned leadership team is the result of a rigorous selection process,” said Future Company President and CEO, Mika Vehviläinen.

The Future Company aims to be a customer-centric organisation of top global talent. The Future Company’s designed high-level operating model would be a customer-centric model as the planned four independent businesses would each serve one clear customer segment – industrial, maritime, ports and roads. This would ensure decision-making close to the customer by fully empowered, agile businesses.

After the completion of the merger, the Future Company is planned to comprise of the following businesses, with their leaders being members of the Future Company leadership team and reporting to Vehviläinen. The naming and branding of the planned businesses is part of the integration planning work and is currently ongoing.

Industrial business
The Future Company plans to combine Konecranes’ Service and Industrial Equipment Business Areas to strengthen the position as a global lifting leader. This would leverage service and equipment offerings and customer excellence to unlock sales opportunities throughout the lifecycle for industrial customers and support the extended lifetime of sustainable lifting products. This business would be led by Fabio Fiorino, currently Executive Vice President, Business Area Service at Konecranes.

Maritime business
Cargotec’s current MacGregor business would continue to serve shipbuilders, shipowners and operators with a strong portfolio of products, services and solutions. As part of a larger group, the business would benefit in areas including sustainability, procurement and digital. This business would be led by Leif Byström, currently President, MacGregor at Cargotec.

Ports business
The Future Company plans to create a new business by combining Cargotec’s Kalmar and Konecranes’ Port Solutions to be a true lifecycle partner for port and terminal customers, capturing technology, innovation and scale benefits to deliver end-to-end material handling solutions including equipment, software and services. This business would be led by Michel van Roozendaal, currently President, Kalmar Mobile Solutions at Cargotec.

Roads business
Cargotec’s current Hiab business would continue as a world’s leading provider of on-road load handling equipment, intelligent services and smart and connected solutions. In the Future Company, the business would also benefit in areas including sustainability, procurement and digital. This business would be led by Scott Phillips, currently President, Hiab at Cargotec.

Future Company Group operations would focus on selected areas that drive value-creating collaboration across the businesses, along with the various activities of publicly listed company. The planned scope of the functions would be the following, with the selected leadership team members planned to report to the Future Company CEO.

Finance would be responsible for Future Company group level accounting and financial reporting, treasury, tax, internal audit and investor relations. Finance would be led by CFO Teo Ottola, currently CFO at Konecranes.

HR would leverage the Future Company’s global talent, setting policies and processes and supporting businesses in areas such as leadership, people and talent management, diversity and inclusion and employee experience. HR would be led by Mikko Pelkonen, currently Senior Vice President, Human Resources at Cargotec.

Technology would drive sustainability and Future Company group efforts in e.g. advanced research, innovation, group IT and digital. Technology would be led by Juha Pankakoski, currently Executive Vice President, Technologies at Konecranes.

Integration would drive and coordinate integration execution and procurement program. Integration would be led by Topi Tiitola, currently Senior Vice President, Integration and Project Management Office at Konecranes.

Strategy and M&A would chart the corporate strategy and direction for the Future Company. Head of Strategy and M&A will be selected later.

Legal and Compliance would be responsible for corporate governance, legal and compliance across the businesses, and other legal topics. Legal and Compliance would be led by Outi Aaltonen, currently Senior Vice President, General Counsel at Cargotec.

Public Affairs and Communications would take responsibility for Future Company corporate relations, the Future Company brand, and group communications activities. Head of Public Affairs and Communications will be selected later.

The planned leadership for the Future Company has been confirmed by both companies’ Boards of Directors.

The planned leadership team would only become effective as of the completion of the merger, which is currently expected to take place by the end of H1 2022. Plans related to the high-level operating model including businesses and business units (including but not limited to the plans to combine two business areas in industrial area and to combine the existing port businesses to create a new business in ports area), group operations, functions, future organisation structure and further selections are subject to separate decision-making as well as to various local legal requirements. Until all merger closing conditions are met and the merger is completed, both Cargotec and Konecranes will operate fully separately and independently, and the current Cargotec Leadership Team members continue to be fully in charge of their current areas of responsibility.

Until the completion of the merger, the Cargotec Leadership Team comprises: