Kone and TK Elevator plan to merge

It is now official: Kone and TK Elevator are proceeding with the merger of the two companies. However, the completion of the transaction is subject to conditions. Employee representatives at TKE are extremely upset.

"Kone and TKE are merging to create a world-class company in the lift and escalator industry," the Finnish and German lift manufacturers stated in a joint press release on 29 April.

On an illustrative basis for the last respective financial year, the combined group would have approximately EUR 20.5 billion in annual sales, of which approximately 65% in service and modernization, more than EUR 2.7 billion in adjusted EBIT, excluding synergies, and approximately 3.2 million units under maintenance. 

The combination would offer "substantial value creation from realized synergies", estimated to be approximately EUR 700 million on an annual run-rate basis, benefitting customers and shareholders alike. Synergies are expected to be realized primarily through higher density of service networks, enhancement of combined R&D capabilities, platform optimization, procurement efficiencies and SG&A savings.

Management of the combined company

It is planned that Kone’s current President and CEO, Philippe Delorme, will lead the combined company in future. Ilkka Hara, Kone’s current CFO, would take on the role of CFO. Antti Herlin would continue to chair the Board of Directors and hold more than 50 per cent of the voting rights in Kone.

Private equity investors Advent and Cinven, through their jointly controlled holding company, would have a right under the SPA to nominate two members of Kone’s Board of Directors following completion, one of whom would serve as co-vice chair of the Board.

According to the press release, the completion of the transaction is subject to regulatory approvals and the approval of Kone shareholders. It is expected in the second quarter of 2027 at the earliest.

Reaction from IG Metall

Knut Giesler, regional director of trade union IG Metall NRW and deputy chairman of the supervisory board of TK Elevator GmbH, notes the announcement of the merger "with great annoyance". "The works council and the employee representatives on the supervisory board see this as a clear breach of the spirit of trust and cooperation." An announcement to the press and the workforce without first informing the co-determination bodies – be it the works councils or the supervisory board – is outrageous. 

From the employee representative’s perspective, the negotiations of recent weeks on a new collective agreement, which was intended to safeguard a potential IPO, have been "reduced to absurdity". In this context, the employee representatives on TKE’s Supervisory Board are calling for "an extraordinary Supervisory Board meeting to be convened immediately within the next seven days" in order to receive detailed information on the further process. "We would like to point out that we view this announcement as an attack on co-determination and on employees in Germany, Europe and globally. There will be appropriate responses to this," Giesler concluded.

More informations: www.kone.de
www.tkelevator.com