Finnish lift maker Kone has agreed to acquire German rival TK Elevator in a €29.4bn transaction, marking the largest corporate deal in Finland and set to reshape the global lift industry.
Kone said the agreement will combine two of the world’s main lift and escalator groups, creating the largest operator in the sector by revenue and service base. The combined company would generate about €20.5bn in annual revenue and employ more than 100,000 people across more than 100 countries.
The deal surpasses the previous record set by Nokia’s €15.6bn acquisition of Alcatel-Lucent in 2015.
Kone plans to fund the transaction through a mix of cash and shares. Around €5bn will be paid in cash, while the remainder will be settled through newly issued shares. The company said it has secured financing from Bank of America and BNP Paribas.
Antti Herlin, chair of Kone and its largest shareholder, said the move aims to strengthen long-term value. “This transaction reflects the Board’s clear ambition to create the strongest possible foundation for long-term value creation,” he said in a statement.
Following the share issue, Herlin will retain control of more than half of the voting rights. He also agreed to purchase shares worth €1bn from the sellers to maintain his position.
TK Elevator, formerly part of Thyssenkrupp, was sold to private equity groups Advent and Cinven in 2020. Kone had also bid for the business at that time but did not succeed.
The companies said the merger will expand their geographic reach. Kone has a strong position in Asia, while TK Elevator has a larger presence in North and South America.
Philippe Delorme, chief executive of Kone, will lead the combined company. He said the merger will improve the group’s ability to meet demand. “By uniting, we are laying the foundation for an even more innovative company, well-positioned for long-term success,” he said.
TK Elevator chief executive Uday Yadav said the two firms will combine their strengths. “Together we will bring the very best of both companies to our customers, our people, and the cities we serve,” he said.
Kone estimates annual cost savings of about €700m from the integration, driven by efficiencies in maintenance networks, procurement and administration. The combined group would service more than three million lifts and escalators.
Competition authorities in Europe and other regions will review the deal. Analysts said regulators may require asset sales in markets where both companies hold strong positions.
The transaction also involves restructuring TK Elevator’s debt of about €9bn. Completion depends on approvals from shareholders and regulators, with Kone indicating the deal could close in 2027 at the earliest.
Kone shares rose following the announcement on the Helsinki exchange.
HT
