KONE-TKE Deal Likely Faces Antitrust Scrutiny, Regulatory Reviews

KONE’s plan to acquire TK Elevator (TKE), announced on April 29, likely faces lengthy European Union (EU) antitrust scrutiny and regulatory reviews in the U.S., U.K. and elsewhere, Reuters reports. Brussels’ antitrust rules, which previously helped squelch a KONE-TKE deal, have come into sharp focus, and any new deal may require asset sales — particularly in Europe — to gain approval. Finland-headquartered KONE, according to the source, is counting on a revamp of EU merger rules that would give companies “more leeway in pursuing continental tie-ups to match the scale of U.S. and Asian rivals.” Under EU proposals, companies could argue for their deals by emphasizing the benefits of sustainability, resilience, investment and innovation to counter fears of consumer harms and an unfair competitive landscape — which Swiss rival Schindler has already brought up. The joining together of KONE and Germany-headquartered TKE would create a company with approximately EUR20 billion (US$23.4 billion) in annual sales, more than 100,000 global employees and a market value of nearly EUR49 billion (US$57.3 billion), according to Reuters calculations, vaulting the combined company well ahead of Schindler and U.S.-based Otis.