Kone Bets on Softer EU Merger Rules in Renewed Pursuit of TK Elevator

The proposed transaction comes years after Brussels’ antitrust framework helped derail an earlier effort by Kone to acquire the German group. But industry sources familiar with the matter say Kone believes planned changes to European Union merger policy may now create a more favorable environment for large regional combinations, according to Reuters.

Kone’s latest bid marks its second attempt in six years to secure a deal involving TK Elevator. Its earlier 17 billion euro approach, backed alongside CVC Capital Partners, was ultimately abandoned in part because of regulatory concerns, per Reuters. TK Elevator, formerly a division of ThyssenKrupp, was later acquired by private equity groups Advent International and Cinven.

If approved, the combination would create the world’s largest listed elevator and escalator group by market value. Speaking after the announcement, Finnish Prime Minister Petteri Orpo said Europe needed more companies operating in the “global top tier.”

Analysts say the timing of the bid reflects growing expectations that Brussels may place greater weight on industrial competitiveness when assessing mergers. Under proposed EU reforms, companies would be able to highlight benefits tied to sustainability, resilience, investment, and innovation as part of their defense during regulatory reviews, according to Reuters.

Panu Laitinmaki, an equity analyst at Danske Bank, said he believed the transaction had a stronger chance of success than similar deals in the past, though he expected some divestments might still be necessary.

“The EU’s stance on major European mergers appears to be shifting, and I see better chances for the deal to go through now than a few years ago,” he said.

A spokesperson for the European Commission said the transaction has not yet been formally submitted for review, adding that notification is the responsibility of the companies involved.

Even with a potentially more flexible regulatory backdrop, the deal is expected to face extensive scrutiny. The merger would reduce the number of major European lift manufacturers from four to three, a shift likely to draw opposition from rivals, including Swiss competitor Schindler, which has already indicated it would contest the deal, according to Reuters.

Based on Reuters calculations, a combined Kone-TK Elevator business would generate roughly 20 billion euros in annual revenue, employ more than 100,000 people globally, and carry a market value close to 49 billion euros. That would place it ahead of Schindler and U.S.-based Otis Worldwide by market capitalization, per Reuters.

The merger would also strengthen Kone’s footprint in the Americas, where TK Elevator has a larger presence, while delivering approximately 700 million euros in annual cost savings, according to Reuters.

Kone Chief Executive Philippe Delorme said during a presentation on Wednesday that he remained confident the company could secure all necessary approvals through cooperation with regulators, though he declined to comment on possible remedies.

Source: Reuters