Kone to be split into two corporations - stock exchange listings for both

print this

Kone, a manufacturer of elevators, escalators, and container and load-handling equipment, will be split into two entities that will both seek listings on the Helsinki Exchanges. The aim of the reorganisation is to seek possibilities for rapid growth through acquisitions.
      The elevator and escalator operations will remain in Kone itself. Subsidiary Kone Cargotec will be comprised of the container and load-handling equipment business.
      In the split, Kone's shareholders will receive shares in the new companies in proportion to their current holdings. Voting rights will also be divided in the same manner as at Kone today.
      In practice, the Chairman of the Board of Kone, Antti Herlin, will retain control in both new companies. Two series of shares will be issued, with Herlin's shares containing considerably more voting rights.
     
Herlin will most likely be selected Chairman in both the new Kone and Kone Cargotec.
      "My sympathies are 100 percent behind both companies. Two extremely strong metal industry companies are about to be created", Herlin commented at the company's press conference on Tuesday.
      The reorganisation was explained by the fact that all synergies in elevator and container and load-handling equipment production have already been achieved. From now on, both units can develop their operations based on their individual strategies.
      The shares of smaller, more specialised units will be easier to use for payment in acquisitions than those of the current Kone.
     
Kone Cargotec products became a part of Kone when it acquired Partek. This purchase cost Kone 1.5 billion euros, but it has since sold off subsidiaries of Partek for 1.2 billion.
      Kone maintains that the split is beneficial for investors, as they will understand the business of the new companies better.
      On the stock exchange, Kone's announcement raised its share price by slightly under four percent.
      Herlin stated that Kone has not calculated the benefits of the split. He admitted that the company could also have continued in its current form, but believed that in this case, one plus one will equal more than two. "The shareholders will get a positive result."
      It will take around one year to carry out the division of the two companies, and the final decision regarding the split will be made by a meeting of shareholders.


Links:
  Kone press release

Helsingin Sanomat