Kone Oyj is preparing to sell most of TK Elevator’s European operations as the Finnish company seeks to ease competition concerns surrounding its €29.4 billion ($33.3 billion) takeover of the German elevator maker, according to Reuters.
The planned divestment would cover TK Elevator’s elevator, escalator and related service businesses across much of Europe. A sale process is expected to begin this fall and could start as soon as November, Reuters reported Thursday, citing two people familiar with the matter.
The potential disposal underscores the regulatory challenge facing one of Europe’s largest pending industrial transactions. Kone agreed in April to acquire TK Elevator from shareholders led by private-equity firms Advent International and Cinven, a combination that would create the world’s largest elevator manufacturer.
TK Elevator generated about €2.5 billion of revenue in Europe last year, representing roughly 27% of its total sales, according to Reuters. Citigroup analysts estimate that European asset sales could raise approximately €2.1 billion.
Kone acknowledged that asset disposals may be required to obtain regulatory approval. In a statement cited by Reuters, the company said it and TK Elevator have been engaging with competition authorities since the transaction was announced and have consistently anticipated that divestitures could be necessary in certain markets.
The Helsinki-based company nevertheless continues to target €700 million in annual synergies from the acquisition, Reuters reported. Advent, Cinven and TK Elevator declined to comment to the news agency on preparations for the European sale.
Concentrated Market Draws Scrutiny
Competition authorities are expected to examine the transaction closely because the global elevator industry is concentrated among four major manufacturers: Kone, TK Elevator, Otis Worldwide Corp. and Switzerland’s Schindler Holding AG. The acquisition would propel the combined Kone-TK Elevator business ahead of US-based Otis in industry scale, according to Reuters.
Read more: US Opens Antitrust Review of Kone’s $34 Billion TK Elevator Acquisition
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The two companies together generated about €7.2 billion in Europe, equivalent to roughly 35% of their combined revenue, Reuters reported. The scale of their regional operations makes Europe a central focus of potential regulatory remedies.
Kone had anticipated that some divestitures could be required. Chief Financial Officer Ilkka Hara told Reuters in June that the company and TK Elevator’s owners had assessed potential regulatory issues before proceeding with the transaction. At the time, he said remedies might be necessary in certain geographic markets.
The takeover isn’t expected to close before the second quarter of 2027, according to Hara’s comments cited by Reuters. The transaction ranks among Europe’s biggest acquisitions in years and would be the continent’s largest private-equity exit since LSEG records began in 1980.
Rivals May See Opportunity
Any forced asset sales could also give competitors an opportunity to expand in Europe. Schindler, which has publicly criticized the Kone-TK Elevator combination, told Reuters in July that it could consider buying businesses made available through regulatory remedies.
Kone has tried to acquire TK Elevator before. It pursued the business in 2020 after then-owner Thyssenkrupp put the unit up for sale, but abandoned a €17 billion nonbinding offer in part because of antitrust risks. TK Elevator was ultimately acquired by a consortium led by Advent and Cinven.
The latest transaction comes as European policymakers debate how competition rules should balance market concentration against the desire to build companies capable of competing globally. Reuters reported in May that changes under consideration to European Union merger policy could give greater weight to the ability of European companies to compete with larger US and Asian rivals.
For Kone, selling a substantial portion of TK Elevator’s European footprint could become a key part of that regulatory calculation — preserving the broader global combination while reducing areas where the two companies’ operations overlap most heavily.
Source: Reuters
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