US Opens Antitrust Review of Kone’s $34 Billion TK Elevator Acquisition

Kone said Tuesday that the Justice Department’s antitrust division had begun an in-depth review to assess the proposed merger’s potential effect on competition in the United States, according to reporting by Bloomberg News.

The Finnish company said it has cooperated with U.S. regulators since announcing the acquisition and continues to expect the transaction to close no earlier than the second quarter of 2027.

“We are confident in the benefits this combination will bring to customers and look forward to delivering those benefits following closing,” Kone said in a statement cited by Bloomberg.

The investigation is still at an early stage. The Justice Department requested additional information from the companies Monday, according to people familiar with the matter who spoke to Bloomberg. Such an extended antitrust review can last a year or longer.

The transaction, announced in late April, would create the world’s largest elevator manufacturer and represents the biggest corporate combination in Finland’s history, Bloomberg reported. It would also significantly expand Kone’s position in the U.S., a market where TK Elevator has a substantial elevator installation and servicing business.

Kone has a stronger presence in Asia, which currently accounts for roughly 35% of its revenue, according to Bloomberg. Acquiring TK Elevator would give the Finnish company greater exposure to the American market and advance its longstanding effort to expand there.

The deal also carries significance for the private-equity industry. TK Elevator is owned by investment firms Advent and Cinven, and its sale would rank among the largest private-equity exits at a time when buyout firms face mounting pressure to sell portfolio companies and return capital to investors, Bloomberg reported.

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

Representatives for TK Elevator, Advent and Cinven did not immediately respond to Bloomberg’s requests for comment. The Justice Department also did not immediately comment to the publication.

Competition concerns have loomed over the acquisition since it was announced. Analysts have cited regulatory scrutiny as one of the transaction’s principal risks, and the combination is expected to face reviews from competition authorities in multiple jurisdictions, according to Bloomberg.

Kone has previously indicated that it is prepared to address regulators’ concerns. Chief Financial Officer Ilkka Hara said in June that the company was planning asset sales as part of that effort, though he did not identify which businesses could be divested, Bloomberg reported.

The U.S. investigation comes as the Justice Department under President Donald Trump’s second administration has signaled a preference for resolving merger concerns through negotiated settlements rather than litigation, according to earlier Bloomberg reporting.

That approach has not eliminated the possibility that federal regulators will push companies to abandon transactions. Bloomberg reported in July that scrutiny from the department prompted a U.S. defense contractor to walk away from a proposed acquisition when faced with the possibility of an antitrust lawsuit.

The specific competition issues being examined in the Kone-TK Elevator transaction have not been disclosed. The Justice Department has separately said it wants to narrow information demands in merger investigations to make the review process less burdensome for companies, Bloomberg previously reported.

For Kone, the outcome of the U.S. investigation will be an important test of whether its biggest-ever expansion can proceed largely as proposed or whether regulatory approval will require asset sales or other concessions.

Source: Bloomberg