Zoomlion Logo, Shanghai, Nov. 29, 2012
National-security concerns could scuttle a proposed combination of the American Terex Corp. and the Chinese Zoomlion Heavy Industry Science & Technology Co. Ltd. Above, a Zoomlion company logo is seen next to its excavators at an exhibition in Shanghai in this file photograph taken Nov. 29, 2012. Reuters/Stringer/Files

Terex Corp., the U.S. crane maker that is fielding a $3.3 billion acquisition offer from China’s Zoomlion Heavy Industry Science & Technology Co. Ltd., said Friday it had halted all work on its integration with Finland’s Konecranes Abp. While Terex has made no decision on whether it will abandon its agreed merger with Konecranes, the move is the clearest indication yet that it views a sale to Zoomlion as a realistic alternative despite concerns such a deal could be blocked by the U.S. over national-security concerns.

Based in Westport, Connecticut, Terex has 97 so-called priority-rated contracts with the U.S. government that could attract scrutiny from the Committee on Foreign Investment in the U.S. (CFIUS). It also provides mobile harbor cranes in ports that are seen as critical parts of U.S. infrastructure.

“Given the uncertainties involved with the merger and proposed acquisition [by Zoomlion], the decision was made to halt information sharing, work on integration and synergies between the businesses, until further clarity can be had on the course of action,” Terex said in a statement after Reuters reported on the cessation of integration work, citing sources.

Financial and antitrust filings regarding Terex’s merger with Konecranes that are in the works will continue unaffected, Terex added, emphasizing that it had not so far changed its recommendation on the merger with Konecranes.

Zoomlion and Konecranes did not immediately offer comment.

Zoomlion has offered $30 per share in cash for Terex, versus the Konecranes offer of 0.8 share for each Terex share that Terex shareholders stand to receive under the deal that was agreed upon in August.

Terex shares jumped as much as 9 percent after the news of the halt in Konecranes integration work, before closing higher by 3.8 percent at $22.93 on the New York Stock Exchange Friday. Konecranes shares closed lower by 5.3 percent at 20.20 euros ($22.5) in Helsinki.

A formal CFIUS review of Zoomlion’s acquisition of Terex would likely take as long as 75 days, according to people familiar with the matter. Terex has not informed Zoomlion how long it will take to make a decision on its latest proposal, the people said.

While Terex disclosed Zoomlion’s approach Jan. 26, Zoomlion first reached out to Terex to express interest at the beginning of the fourth quarter of 2015 and made its latest offer Dec. 4, according to the sources. Zoomlion does not plan to go hostile with its bid for Terex should it be rebuffed, the sources added.

The financing commitments Zoomlion has received for the transaction are valid for the entirety of the potential CFIUS review, until the deal closes, and include commitments from Chinese banks, according to the sources.

Hunan province and Hony Capital, which together with management own about 30 percent of Zoomlion’s shares, both support the Terex transaction, the sources said.

This week, U.S. Rep. Duncan Hunter, R-Calif., a member of the House Committee on Armed Services, raised concerns about a possible Zoomlion-Terex deal in a letter to U.S. Treasury Secretary Jack Lew, citing the Chinese company’s longtime association with China’s People’s Liberation Army.

“People may think, ‘Oh, Terex builds cranes, it does not really impact our national security,’” said Stephen Cheney, a retired U.S. Marine Corps general who is CEO of the American Security Project, a public policy and research organization. “But it really does. The company has huge defense industry ties, and if you are positioned in U.S. bases and stations and you watch the movements of troops and what is going on in those bases, you are really allowing them access to classified information they should not have and could exploit,” Cheney said. “It is very problematic in my view.”

U.S. companies also worry increasingly about how CFIUS will view Chinese acquirers. Fairchild Semiconductor International Inc. Tuesday declined an offer from China Resources Microelectronics Ltd. and Hua Capital Management Co. Ltd. because of concerns that CFIUS would reject the deal.