Terex, REV Group to merge in $9B stock-and-cash deal

Equipment manufacturers Terex and REV Group will merge in a $9 billion stock-and-cash transaction, the companies announced today. 

The merger will create a diversified specialty equipment manufacturer serving emergency, waste, utilities, environmental and materials processing markets, Simon Meester, president, chief executive and director of Terex, said during a Terex and REV Group call today. 

“With this merger, we wanted to re-baseline the company …  so with the REV Group and our materials processing segment and our environmental solutions segment, we’re basically becoming a new company,” he said. “What we want to pursue is a more predictable, much less cyclical kind of earnings profile.” 

The combined company is expected to generate about $7.8 billion in annual sales with an adjusted EBITDA margin of roughly 11% for 2025, excluding anticipated synergies, according to a Terex release. Terex will own about 58% of the new entity, while REV Group shareholders will hold 42%. 

Meester will lead the combined company, which will trade under the Terex ticker “TEX,” according to the release. The transaction, approved by both boards, is expected to close in the first half of 2026 pending shareholder and regulatory approvals. 

Norwalk, Conn.-based Terex also plans to exit its aerials segment to further reduce exposure to cyclical markets, Meester said. Terex’s aerials segment products consist of its Genie subsidiary, according to the company’s website. 

“It is a cyclical business, but there are suitors out there that like that kind of profile, so we are not concerned that there won’t be any suitors,” he said. “Quite the opposite, we think there will be quite a few, so for the simple matter is that it’s a very recognized business on how it performs through the cycle.” 

Terex’s aerial sales drop 13% YoY in Q3 

In addition to the merger, Terex announced its third-quarter earnings today, which saw its aerials segment sales decline 13.2% YoY to $537 million. 

Terex also reported the following in Q3: 

• Net sales totaled $1.4 billion, up 14.4% YoY; 

• Environmental Solutions sales were $435 million, up 13.6% YoY; 

• Materials Processing sales finished at $417 million, down 6.1% YoY; 

• Aerials backlog landed at $219 million, up 163.9% YoY; and 

• Materials processing backlog rose to $394 million, up 52.7% YoY. 

As a result, the company maintained its full-year earnings guidance, Senior Vice President and Chief Financial Officer Jennifer Kong-Picarello said in the earnings release. 

“Looking ahead, bookings across the company have returned to normal seasonal patterns with year-over-year pro forma growth of 57% and healthy backlog supports our Q4 sales outlook,” she said. “We expect higher tariff-related costs in Q4 largely due to the expanded scope of the 232 steel and aluminum tariff that was announced in mid-August.”  

Market reaction 

Meanwhile, the merger, which looks more like an acquisition of Brookfield, Wis.-based REV Group, and earnings miss due to lower-than-expected aerials and materials processing sales, resulted in a stock slide for Terex, according to a Citi research note issued today. Still, the overall deal should benefit from the new version of Terex moving forward, Citi stated. 

“We think the combination makes general sense, with some straightforward synergies, and it goes toward further reducing TEX’s cyclicality,” according to the note. “We do question how much value Genie can garner, which we view as a key swing factor to the success of the deal.” 

Shares of Terex [NYSE: TEX] were down 15.70% or $8.79 to $47.19 as of market close today. Terex has a market capitalization totaling $3.63 billion. 

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