Helsinki (AFP) – Finnish lift maker Kone on Wednesday announced the acquisition of its German rival TKE in a huge share-and-cash deal valuing TKE at 29.4 billion euros ($34.4 billion) to create a global giant. The group formed by the merger will be nearly twice the size of the current Kone group, with more than 100,000 employees in over 100 countries and annual revenue of around 20.5 billion euros, the two companies said in a statement.
TKE, or TK Elevator, split from Germany’s Thyssenkrupp to become a standalone company in 2020 and is owned by a consortium including the private equity groups Advent and Cinven. The elevator market is driven by urbanisation and a growing service sector, as demand grows in countries with aging populations too weak to use stairs, according to experts. The deal announced Wednesday is one of Europe’s biggest-ever takeovers involving private equity groups, according to Bloomberg, and the largest corporate acquisition ever carried out in Finland, Finnish media said.
The new group will be based in Finland and led by Kone’s current French chief executive Philippe Delorme. The chairman of Kone’s board of directors, Antti Herlin, ranked by Forbes as Finland’s richest man, will remain chairman of the new group. Founded in the early 20th century, Kone has been controlled for about a hundred years by the Herlin family.
“This industry-revitalising transaction brings together two exceptional global businesses with highly complementary geographic footprints and innovation platforms,” the joint statement said. “Kone’s presence in Asia is complemented by TKE’s footprint in the Americas and TKE opens new geographies for Kone, resulting in a well-balanced global presence.” The German group generates 45 percent of its revenue in the United States.
The consortium that owns TKE will receive five billion euros and 270 million shares in the new Kone, valued at 15.2 billion euros, and will hold 33.8 percent of the new entity, according to the statement.
– ‘Accelerate shift’ –
The two groups said they expect annual synergies of 700 million euros from the acquisition, which is expected to be concluded by the second quarter of 2027 at the earliest. The merger will “accelerate our strategic shift to service and modernisation, reinforcing our resilience,” Delorme said in the statement. Services and modernisation will account for about 65 percent of the new group’s annual sales.
Investors welcomed the deal, with Kone shares gaining 2.4 percent to 57.66 euros on the Helsinki stock exchange in mid-morning trading. “The industrial logic of this transaction is very solid. Naturally, this deal still involves risks related to regulatory authorities and integration,” analyst Aapeli Pursimo of the Finnish stock market advisory firm Inderes said in a note.
On the European market in particular, overlaps could require the new group to divest activities, he said, while competitors such as Schindler could voice criticism. Pursimo meanwhile welcomed “the fact that Kone’s current management, led by Philippe Delorme and (chief financial officer) Ilkka Hara, would continue at the helm of the combined company, which will bring continuity to the implementation of the integration.”
Philippe Delorme, born in 1971, became chief executive officer of the Finnish group in January 2024 after more than 25 years at French industrial group Schneider Electric. In 2025, Kone registered sales of 11.2 billion euros, compared to 9.2 billion for the German group.
© 2024 AFP
