Kone to Buy TK Elevator in €29.4 Billion Deal, Creating World's Largest Elevator Maker

Key facts

• Kone has agreed to buy TK Elevator for €29.4 billion ($34.4 billion).
• The deal will create the world's largest elevator maker, surpassing Otis and Schindler.
• Kone expects annual synergies of €700 million from the combination.
• Shareholders holding over 40% of Kone shares and 74.3% of votes support the deal.
• TK Elevator was acquired by Advent and Cinven for €17 billion in 2020.
• Thyssenkrupp shares rose 8% on the news, after climbing as much as 14%.
• Schindler has indicated it may challenge the deal before antitrust authorities.

A Transformative Merger

Finland's Kone has agreed to acquire German rival TK Elevator in a deal valued at €29.4 billion ($34.4 billion), marking one of Europe's largest takeover agreements in recent years. The cash and share transaction, which had been rumored in recent days, will create the world's largest elevator maker, overtaking U.S.-based Otis and Switzerland's Schindler. Kone said the combination would result in estimated synergies of €700 million on an annual run-rate basis. The company also announced that shareholders holding just over 40% of all outstanding shares and approximately 74.3% of total votes have agreed to support the deal.

The Parties Involved

Kone CEO Philippe Delorme said in a statement, "By uniting, we are laying the foundation for an even more innovative company, well positioned for long-term success." TK Elevator CEO Uday Yadav welcomed the announcement, noting that the two companies share a "deep respect" for each other. He added, "Together we will bring the very best of both companies to our customers, our people, and the cities we serve." TK Elevator became an independent company after separating from Thyssenkrupp in 2020. Private equity firms Advent and Cinven bought TK Elevator for around €17 billion at the time.

Market Reaction and Antitrust Concerns

Shares of German steel company Thyssenkrupp rose 8% on the news, paring gains after having climbed as much as 14%. The proposed merger is expected to face industry scrutiny, with Schindler telling Reuters late last month that it was prepared to challenge any such deal before antitrust authorities. The deal would combine two companies with over a century of history each, developing their businesses in tandem with an urbanizing world. The creation of the world's largest elevator maker raises questions about competition in the sector.

Strategic Rationale and Synergies

Kone expects the acquisition to generate significant cost and revenue synergies, targeting €700 million in annual run-rate savings. The combined entity will have a stronger presence in key markets, particularly in Europe and Asia, and will benefit from complementary product portfolios. The transaction is structured as a cash and share deal, with Kone financing part of the purchase through debt and equity. The support from major shareholders provides a strong mandate for the merger.

Historical Context and Industry Impact

Both Kone and TK Elevator have operated for over a century, growing alongside the urbanization of the world. The elevator industry has seen consolidation in recent years, with companies seeking scale to invest in new technologies such as smart elevators and predictive maintenance. The acquisition of TK Elevator by private equity firms Advent and Cinven in 2020 for €17 billion was itself a major transaction. Now, Kone's purchase at a significantly higher valuation reflects the strategic importance of the elevator business.

Outlook and Open Questions

The deal is subject to regulatory approvals in multiple jurisdictions, and antitrust authorities are expected to scrutinize the combination closely. Schindler's stated willingness to challenge the deal suggests a potentially lengthy review process. If completed, the merger will reshape the global elevator market, creating a clear leader ahead of Otis and Schindler. The integration of two large companies with distinct cultures and operations will be a major challenge for management.

A Defining Moment for Kone

For Kone, this acquisition represents a defining moment in its history, propelling it to the top of the industry. The company's ability to realize the projected synergies and navigate regulatory hurdles will determine the success of the deal. The elevator industry is poised for further consolidation, and Kone's bold move sets a new benchmark for scale and ambition. The coming months will reveal whether the merger clears antitrust hurdles and delivers on its promised benefits.

The bottom line

• Kone's €29.4 billion acquisition of TK Elevator will create the world's largest elevator maker.
• The deal is backed by shareholders with over 40% of shares and 74.3% of voting rights.
• Annual synergies of €700 million are expected from the combination.
• Antitrust challenges are likely, with Schindler signaling it will contest the deal.
• Thyssenkrupp shares rose 8% on the announcement, reflecting market optimism.
• The merger marks one of Europe's biggest takeovers in recent years.