(Photo: © LIFTjournal/Dirk Müller/KI-assistiert mit Firefly und ChatGPT)
July 2026
The announcement of Kone’s takeover of TK Elevator has sent shockwaves through the industry. Suddenly, there is talk of a new mega-conglomerate, a potential shift in power within the service sector, and the fact that the wave of consolidation has now reached the Big Four themselves.
Above all, however, small and medium-sized enterprises are wondering whether things will become difficult for them in the future. I have a clear view on this: For SMEs, far less will change than many currently believe.
AN ANALYSIS BY DR LARS WATERMANN
A sober look at the facts shows that, so far, only a draft agreement exists. The most important point, however, remains completely open: how is the announced potential saving of 700 million euros per year to be achieved? Who will have to go, which parts of the business will remain, and where will there be mergers? But even if these questions can be resolved, there is still the elephant in the room. That is antitrust approval, which will ultimately decide whether the deal can be implemented as hoped, or whether it will have to be scaled back.
I share the view of many experts that the antitrust authorities will not simply wave a full merger through. Insiders expect that at least the core European countries will be spun off from the deal to prevent excessive market power in this region. And it is precisely at this point that the takeover is already losing significant momentum.
Furthermore, even Kone expects the European authorities’ decision to take up to eighteen months. From numerous transactions we have advised on, we know that buyers and sellers remain in a state of operational limbo until the antitrust decision is made. This ‘gun jumping’, a term familiar from competition law, is intended to prevent a merger from effectively being implemented before the antitrust authorities have given their approval.
At present, therefore, the deal is in an Artificial coma thanks to competition law. The next step will eventually be the recovery phase, during which the extensive post-merger integration will take place. It is likely to take a good five years before the “patient” can fully harness its new strength.
“I share the view of many experts that the antitrust authorities will not simply approve a full merger without conditions.” Dr Lars Watermann
But even then, there is no excessive risk. After all, most SMEs are playing a different game to the big players anyway. They do not win through global platforms or standardised mass production, but through regional presence, speed, specialised solutions and, above all, customer proximity. Furthermore, many customers continue to specifically choose a medium-sized lift company because they are not prepared to pay hourly rates in excess of 150 euros (net) for a service that is, at best, comparable.
Incidentally, the scenario outlined above involving the spin-off of the core European countries would also support the high valuations of SMEs – because the pool of potential bidders would not shrink in this case. After all, in the event of only a partial merger, this TKE division would have to find a new owner. But where would that come from? Presumably, for antitrust reasons, this attractive business cannot go to Schindler or Otis. Other major players such as Orona, Mitsubishi Electric or Hitachi will also be out of the running, as Kone will be wary of handing competitors a golden opportunity to enter the market or expand their business in this region.
Instead, private equity investors are likely to be interested in this sector. We know how they operate: they hold onto the company for a few years and maximise its value during that time – partly through strategic acquisitions. After all, TKE’s previous owners have shown how to turn €17 billion into €29.5 billion in just a few years. Acquisitions played a decisive role in boosting the company’s value.
The pool of potential bidders therefore remains large, although there is also pressure to make strategic acquisitions. In this context, incidentally, there is also an interesting signal that I am picking up in my day-to-day work: both Kone and TKE are finalising ongoing mergers and acquisitions (M&A) projects and are continuing to bid (highly) for companies currently on the market.
So what remains in the end? Yes, the announced transaction is a major one. Perhaps even historically significant. But before it actually goes through, many hurdles still need to be overcome. And no one yet knows what the end result will look like.
Either way, this merger will have an impact, primarily on the manufacture of standard lifts and the level of digitalisation in the lift industry. In the service and specialist systems sector, however, many operators still prefer to rely on a medium-sized lift company, as they have done in the past. Good business continues to be done here. Because size alone does not change a market.
The author is the managing director of Watermann Agens GmbH and specialises in corporate transactions within the lift industry. Since 2005, he has advised more than 25 lift companies on the sale of their businesses, including Weymann, M.S. Schernikau, Butz & Neumair, the Eggert Group, Janzhoff, Mayland, Joh. Holtz, Grädler, R&S, fb Aufzüge, Aufzugteile B&T, Häfelein & Windeck, Colonia, Dralle, A.S. Aufzug + Service and osma (3 branches).
More informations: watermann.ag
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