HELSINKI, May 16 (Reuters) - Finnish crane maker Konecranes said on Monday it has agreed to buy U.S. Terex Corp's Material Handling & Port Solutions unit for 1.1 billion euros ($1.24 billion) in cash and shares.

The move cancels a proposed full merger between the companies and paves the way for Terex to continue deal talks with another company, China's Zoomlion.

Konecranes and Terex agreed to an all-share merger in August 2015, but Terex then received a $3.4 billion non-binding cash bid from Zoomlion.

Konecranes said it targets synergies of about 140 million euros from the deal within three years. It said Terex becomes a 25 percent shareholder in Konecranes.

Terex has the right to terminate the deal before the end of the month for a fee of $37 million, if Terex and Zoomlion agree on a sale of Terex as a whole. ($1 = 0.8839 euros) (Reporting by Jussi Rosendahl; editing by Adrian Croft)