TLDR
- Terex dives 14% after $9B REV Group merger and surprise Aerials exit reveal.
- Merger shock: Terex stock tumbles as Aerials unit exit rattles the market.
- Terex drops hard on bold $9B REV deal and Aerials business shake-up.
- TEX sinks 14% amid REV merger news and Aerials segment phase-out.
- Terex plans Aerials exit after REV Group merger, TEX stock takes a hit.
TEX stock dropped 14.27% to $47.99 after it announced a $9 billion merger with REV Group and plans to exit its Aerials segment.
Terex Corporation, TEX
The sharp decline followed Terex’s Q3 2025 earnings, where the market reacted negatively to the company’s forward outlook and strategic shift. The intraday performance showed strong selling pressure, reflecting weak sentiment around the stock.
Terex CorpTEX) announced a definitive merger agreement with REV Group in a stock and cash transaction valued at approximately $9 billion. Under the terms, REV shareholders will receive $8.71 in cash and 0.9809 shares of the combined company for each REV share. The merged entity will operate under the Terex name and continue trading on the NYSE under the symbol TEX.
The merger will result in TEX shareholders owning 58% and REV shareholders 42% of the combined company’s outstanding shares. The deal has been approved unanimously by both boards and is expected to close in the first half of 2026. Regulatory approvals and shareholder votes from both parties remain as key closing conditions.
By combining complementary businesses, TEX and REV aim to form a leader in specialty equipment manufacturing. Their product portfolios span emergency services, waste management, utilities, and environmental solutions. The merged group projects $7.8 billion in net sales and an adjusted EBITDA margin of 11% in 2025.
Terex Plans Exit From Aerials Segment Amid Strategic Shift
TEX confirmed plans to exit its Aerials segment through a potential sale or spin-off. This decision aligns with its broader strategy to focus on higher-growth, lower-cyclicality segments with more stable demand. The exit could significantly improve the combined company’s margin profile.
The Aerials divestiture is expected to support the new entity’s goal of achieving a 14% adjusted EBITDA margin by 2025. The process will also help reduce leverage further, targeting a 2.5x net debt-to-EBITDA ratio including synergies. The move highlights TEX’s intent to optimize its portfolio for long-term growth.
Management emphasized that divesting Aerials will allow greater investment flexibility in its core equipment businesses. TEX aims to reinvest capital into operations that offer higher returns and better demand resilience. The company expects this step to accelerate operational efficiency and financial performance.
Synergies, Scale and Governance Shape the Future of Terex
The combined company anticipates generating $75 million in annual run-rate synergies by 2028, with 50% achieved within one year of closing. TEX and REV have strong integration records, which management believes will ensure a smooth transition. These synergies aim to enhance competitiveness and drive long-term value creation.
The merged group will benefit from a broader scale, expanded manufacturing footprint, and diversified end markets. TEX expects stronger financial flexibility and higher free cash flow to support innovation and growth initiatives. This strategic position could provide a more stable earnings stream moving forward.
The board will consist of 12 directors, with seven from TEX and five from REV Group. Current Terex CEO Simon Meester will lead the new company, supported by a combined management team. The structure reflects efforts to balance leadership roles and drive unified strategic execution.
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