KONE and TKE To Combine, With KONE Acquiring All of TKE

KONE announced on April 29 it has entered into an agreement with a consortium led by Advent and Cinven, through holding company Topco I S.A., to combine KONE and TKE in a cash and share transaction, bringing together two global elevator and escalator companies. Under the agreement, KONE “would acquire the entire issued share capital of Topco I S.A., which holds all assets of TK Elevator GmbH and its direct and indirect subsidiaries.” Subject to regulatory approval and approval during an Extraordinary Meeting of KONE expected to be convened in June, the transaction “brings together two exceptional global businesses with highly complementary geographic footprints and innovation platforms,” KONE stated. “The combination would offer substantial value creation from realized synergies, estimated to be approximately EUR700 million (US$818.9 million) on an annual run-rate basis, benefitting customers and shareholders alike.” Based on the last financial year, the combined group would have approximately EUR20.5 billion (US$23.9 billion) in annual adjusted earnings, “excluding synergies,” and approximately 3.2 million units under maintenance. Current KONE CEO Philippe Delorme would lead the combined group, with Ilkka Hara as chief financial officer. Antti Herlin would remain as chairman of the Board of Directors with ownership representing more than 50% of voting rights.