|Bid||52.54 x 0|
|Ask||52.56 x 0|
|Day's Range||52.44 - 53.22|
|52 Week Range||38.05 - 55.64|
|Beta (3Y Monthly)||0.54|
|PE Ratio (TTM)||31.97|
|Earnings Date||Oct 23, 2019|
|Forward Dividend & Yield||1.65 (3.11%)|
|1y Target Est||43.00|
(Bloomberg Opinion) -- Ever since humans first rode in an elevator more than a century ago we’ve been afraid of getting stuck in one (or worse). The related requirement that these modern marvels are serviced and upgraded regularly is pretty handy for industry leaders Otis, Kone Oyj, Schindler and Thyssenkrupp AG. The companies generate about half their elevator revenues this way, as opposed to the lower-margin sales of original equipment.In good years Otis and Kone have achieved an operating return on sales in excess of 14%. That’s decent for the industrial sector, although a competitive Chinese market has made things more difficult lately.Tough safety regulations and the need to support big teams of technicians are a natural defense against new competitors. The four companies I mentioned have locked up more than 60 percent of the elevator market. Three of them are European.(1)The decent profitability and oligopolistic industry structure are big attractions for would-be acquirers of Thyssenkrupp’s elevator unit, which the German conglomerate has put up for sale. But the big four’s dominance won’t have gone unnoticed by antitrust officials, who could play a central role in determining how any further consolidation plays out.Depending on the bidder, any political desire to build a European elevator champion may run into resistance from those who fear entrenching the power of already dominant companies (as happened when Germany’s Siemens AG and France’s Alstom SA tried to merge their rail businesses).Thyssenkrupp isn’t the only active player in the industry. United Technologies Corp.’s move to spin out its Otis elevator unit has triggered speculation that the U.S. manufacturer might also get involved in M&A. Last week, Switzerland’s Schindler denied a report that it had been targeted by its American rival. Finland’s Kone, meanwhile, is open about wanting to buy the Thyssenkrupp business, telling the Handelsblatt newspaper last week that the two companies would be “a perfect fit.”Combining Kone and the Thyssenkrupp unit would create an industry behemoth with more than 16 billion euros ($17.7 billion) of sales. Though weaker than Kone’s, Thyssenkrupp’s elevator earnings have tended to far outstrip what the unwieldy German conglomerate makes from its other businesses. Its future should be bright too.Urbanization, aging populations and more single-person households are all spurring the construction of denser, taller residential buildings, especially in Asia. China accounts for more than 60% of the world’s new elevator installations.It’s reasonable to think the Thyssenkrupp elevator business would be worth about 15 billion euros if carved out – double the value investors ascribe to the whole conglomerate today. Add a premium for potential synergies and the value could rise further. Kone and Thyssenkrupp would complement each other well: the former is stronger in China while the latter has a bigger U.S. business. And the potential procurement, research and labor force savings from a merger would surely beat any earnings improvements that a private equity buyer could deliver by itself.The big question is whether antitrust officials would agree to two of the big four elevator firms merging? It’s barely a decade since the European Union smacked the companies with almost 1 billion euros in fines for running a price-fixing cartel in several countries. Company employees rigged bids involving hospitals, the European Commision noted. Hardly a good precedent.Thyssenkrupp is burning cash and its stock has fallen more than 35% in the past year. It can ill afford to get involved in another protracted and ultimately unsuccessful antitrust review. Earlier this year Brussels blocked an attempt to combine its European steel operations with Tata Steel. Kone could sell certain assets to ease competition concerns. Still, it’s understandable that Thyssenkrupp is said to favor a partial sale to private equity, according to Bloomberg News’s Aaron Kirchfeld and colleagues. This might not realize the highest price but it’s surely the easier deal to pull off, provided trade unions can be reassured.Europe has three world-beating elevator makers. Reducing the trio to two has clear benefits for the companies. What’s in it for customers isn’t quite so obvious. (1) The maintenance business is more fragmented, however.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Thyssenkrupp AG Chief Executive Officer Guido Kerkhoff has signaled to private equity suitors he prefers selling only a minority stake in its elevator division to raise much-needed cash while retaining control of the beleaguered conglomerate’s crown jewel, people familiar with the matter said.Top management have floated the idea of selling a 49% stake in the elevator unit to buyout firms along with added governance rights, said the people, who asked not to be identified because discussions are private. That structure could generate enough money to address funding and pension needs while allowing Thyssenkrupp to benefit from a private equity-managed improvement of the business, followed by an eventual listing or sale in the years ahead, they said.Thyssenkrupp this week invited about 10 private equity firms as well as four rival elevator manufacturers to bid for the business, which could be valued at more than 15 billion euros ($16.6 billion), according to the people. Several investment firms will start making proposals next week, with elevator companies likely to follow afterward, they said. Some of the buyout firms may express an interest in a majority stake, the people said.Kerkhoff had previously planned an initial public offering of the unit. The company’s worsening financial performance and a slowing German economy has forced him to look at partial or full sale, which could fetch a higher price and bring in cash sooner.Thyssenkrupp shares fell 2.3% to 11.95 euros on Monday, valuing the group at 7.4 billion euros. Compromise DealWhile Thyssenkrupp and its advisers will review all proposals, the CEO sees a partial sale to private equity as a compromise between an IPO -- which would raise less money and take longer -- and a full exit that would leave the struggling group with underperforming assets, the people said.“In addition to preparing for the IPO, we are also examining expressions of interest from potentially interested parties,” Thyssenkrupp said in a statement. “We are doing this diligently. We have therefore initiated a structured process to evaluate offers from strategic and financial investors ensuring a decision that is sustainable and the best for Thyssenkrupp and its stakeholders.”Thyssenkrupp also sees the merits of a private equity buyer over a tie-up with another competitor because it would avoid the risks of a long antitrust review, the people said. The Essen-based firm was burned earlier this year when European regulators derailed a planned steel joint venture with Tata Steel Ltd.Thyssenkrupp is broadening the process and ramping up competitive tension as Finnish rival Kone Oyj works on a takeover offer for the elevator business. The longtime suitor has pitched potential cost savings and the advantages of creating a larger industry leader, the people said. In an interview with the Rheinische Post newspaper published Thursday, Kone CEO Henrik Ehrnrooth said the elevator division of Thyssenkrupp “would be a perfect match.”Kone, which has lined up financing for its planned bid, could also seek a buyout partner for certain assets to preempt pushback from antitrust regulators, they said. Several private equity firms have already approached Kone about the idea, the people said. The Finnish could also offer a higher price and a break fee to cover the antitrust risk, two of the people said.Antitrust ApprovalsApollo Global Management Inc., Advent International, Blackstone Group Inc., Brookfield Asset Management Inc., Clayton Dubilier & Rice, Cinven, CVC Capital Partners, EQT Partners and KKR & Co. are among investment firms that were invited to submit offers, according to the people. Some of the private equity suitors are considering teaming up and may seek backing from Asian or Canadian sovereign and pension funds, the people said.Japan’s Hitachi Ltd. is also working with an adviser as it pursues a potential offer for all or part of the elevator business, the people said. The Tokyo-based company may also wait and pick up any assets that the ultimate buyer has to sell to get antitrust approval, the people said.No final decisions have been made, and there’s no certainty the suitors will proceed to submit bids, the people said. Representatives for Advent, Blackstone, Brookfield, CVC, EQT, KKR, Cinven and Kone declined to comment. Representatives for Apollo, CD&R and Hitachi didn’t immediately respond to requests for comment.Some within Thyssenkrupp’s powerful labor unions would also prefer bids from private equity firms or Hitachi because they believe a tie-up with Kone would be more likely to lead to job losses, according to one person. Equity investors and labor unions are equally represented on Thyssenkrupp’s supervisory board, giving them both influence over a potential deal.Activist investor Cevian Capital, Thyssenkrupp’s second-biggest shareholder, prefers a full sale of the elevator business, the people said. A representative for Cevian declined to comment.(Adds shares in fifth paragraph.)\--With assistance from Jan-Henrik Förster, Dinesh Nair, Michael Hytha and Eyk Henning.To contact the reporters on this story: Aaron Kirchfeld in London at email@example.com;William Wilkes in Frankfurt at firstname.lastname@example.org;Sarah Syed in London at email@example.comTo contact the editors responsible for this story: Reed Landberg at firstname.lastname@example.org, ;Daniel Hauck at email@example.com, Ben Scent, Aaron KirchfeldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FRANKFURT/DUESSELDORF, Germany, Sept 5 (Reuters) - Finland's Kone is considering teaming up with a private equity partner to bid for Thyssenkrupp's elevator business, three people familiar with the matter said. Kone has long been interested in Elevator Technology (ET) - which analysts say could be worth as much as 17 billion euros ($19 billion) - and has been exploring options for a deal with the help of Bank of America, sources told Reuters in May.
FRANKFURT/DUESSELDORF, Germany (Reuters) - Finland's Kone is considering teaming up with a private equity partner to bid for Thyssenkrupp's elevator business, three people familiar with the matter said. Kone has long been interested in Elevator Technology (ET) - which analysts say could be worth as much as 17 billion euros ($19 billion) - and has been exploring options for a deal with the help of Bank of America , sources told Reuters in May. No final decision has been made and Kone could still decide to submit an offer for the unit on its own, the people said.
(Bloomberg) -- Thyssenkrupp AG informed potential buyers of its elevator business that the crisis-hit firm will consider a range of bids for the unit, according to people familiar with the matter.The company sent a letter Wednesday to potential investors in the elevator division, indicating it would be open to both minority and majority offers for the unit, said the people, who asked not to be identified discussing private information. The company had previously said it planned a minority public listing for the elevator business.A range of investors are interested in acquiring all or part of Thyssenkrupp’s elevator unit after the company in May said it was interested in listing the division to shore up its ailing balance sheet. Chief Executive Officer Guido Kerkhoff envisaged a listing of a minority of shares that would allow the submarine-to-steel conglomerate to keep profits generated by the unit which is riding a global megatrend for urbanization.“We have clearly stated that, in addition to preparing for the IPO, we are also examining expressions of interest from potentially interested parties,” the company said Wednesday. “We are doing this diligently. We have therefore initiated a structured process to evaluate offers from strategic and financial investors ensuring a decision that is sustainable and the best for Thyssenkrupp and its stakeholders.”Thyssenkrupp shares rose as much as 5.5% to 11.21 euros, and traded at 11.03 euros at 2:21 p.m. in Frankfurt.Among industry rivals, Finnish elevator maker and longtime suitor Kone Oyj has expressed interest in the division, people familiar with the matter have previously said. Private equity firms including Advent International, Bain Capital, CVC Capital Partners and KKR & Co. are also interested, the people have said. Analysts have also suggested Hitachi Ltd. may be a good match. Thyssenkrupp is poised to open a data room for potential buyers this month, the people said in July. The German conglomerate, when examining bids, will need to balance the goal of seeking the highest price as well as risks to completion. Kone, for example, is keen to buy a majority of the elevator business, but Thyssenkrupp is concerned about a lengthy antitrust review and rejection of a merger, people have said.The division, Thyssenkrupp’s crown jewel, makes parts used in elevators, escalators, moving walkways and stairlifts and could be worth about 15 billion euros in an IPO or sale, according to Bloomberg Intelligence analysts.Thyssenkrupp, among the last of Germany’s giant conglomerates, last month cut its profit outlook and said it was considering a major breakup as Europe’s economic slowdown bites. The stock has lost 27% this year, making it the second-worst performer on Germany’s benchmark DAX index this year.(Updates with share price, details)\--With assistance from Aaron Kirchfeld.To contact the reporters on this story: William Wilkes in Frankfurt at firstname.lastname@example.org;Eyk Henning in Frankfurt at email@example.comTo contact the editors responsible for this story: Reed Landberg at firstname.lastname@example.org, Liezel Hill, Nicholas LarkinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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When Thyssenkrupp CEO Guido Kerkhoff announced plans to list its prized elevators unit last week, he set off a battle for the conglomerate's future that could test Germany's brand of "social market" capitalism. Kerkhoff had little choice but to think the unthinkable when the company's share price sank to a 15-year low on May 8. Now Thyssenkrupp's future is in play, with activist investors on the one side baying for a restructuring of the group to drive up value, and its top shareholder - the charitable Krupp foundation - and workers on the other side with a mandate to protect the unity of the company and jobs.
Shares in Thyssenkrupp rose as much as 7.2% on Thursday after Reuters reported Finnish company Kone is assessing the viability of a bid for the German conglomerate's 14 billion euro (12 billion pounds) elevators division. Thyssenkrupp last week dropped plans to spin off its capital goods business after months of shareholder criticism, and opted instead to list elevators, its most profitable division. Four people familiar with the matter said it was not clear if Kone could fund an all-cash bid and whether or not the deal would face significant anti-trust hurdles similar to Thyssenkrupp's failed steel joint venture with India's Tata Steel.
FRANKFURT/DUESSELDORF (Reuters) - Finland's Kone is assessing the viability of a bid for Thyssenkrupp's 14 billion euro (12 billion pounds) elevators division even as the German conglomerate pursues plans to list it, four people familiar with the matter said. Thyssenkrupp last week ditched a plan to spin off its capital goods business after months of shareholder criticism, and opted instead to list elevators, its most profitable division, to raise badly needed cash. The sources said it was not clear if Kone could fund an all-cash bid and whether or not the deal would face significant anti-trust hurdles similar to Thyssenkrupp's failed steel joint venture with Tata Steel.
FRANKFURT/DUESSELDORF, Germany (Reuters) - Thyssenkrupp's elevator business, the conglomerate's crown jewel that it plans to list, saw operating margins fall in the second quarter due to higher material costs that also hit Swiss rival Schindler. The unit, which also competes with Finland's Kone and United Technologies Corp's Otis, is Thyssenkrupp's prize asset and investors have long demanded that it needs to be listed, merged with a peer, or sold. Adjusted operating profit (EBIT) margins at the division, however, fell to 10.6% in the second quarter, down from 11.6% a year earlier, Thyssenkrupp said on Tuesday.
Thyssenkrupp shares leapt 20 percent on Friday as investors rushed to cover bearish bets after the conglomerate announced plans to list its best business, a move long hoped-for by investors. Thyssenkrupp is considering a carve-out or listing of its elevators business after abandoning plans to split itself up with a cross-shareholding structure and pulling the plug on a joint venture with Tata Steel. The shares rose as investors scrambled to cover large bearish bets, analysts and traders said.
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Kone reported higher than expected first-quarter sales and its Chief Executive Henrik Ehrnrooth said the Chinese government's decision to loosen some of its restrictions on construction and housing had been a positive impact on its operations in China. "We did not see a stimulus (from the government) in construction but some restrictions on construction and property markets were loosened up. "But we do expect the governmental restrictions in the 100 largest cities to continue and if the markets become more active, they are likely to be tightened," he added.
KONE Corporation, press release, February 27, 2019 KONE, a global leader in the elevator and escalator industry, has won an order to supply elevators and escalators for stages four and five of the Thomson-East Coast Line of Singapore`s Mass Rapid Transit (MRT) system and pedestrian overhead bridges. KONE will supply the city`s transport system with a total of 218 elevators and 183 escalators. It also includes provision of elevators for the upcoming "four-in-one" rail and bus depot, a multi-level complex that incorporate three MRT depots and one bus depot.
KONE Corporation, stock exchange release, February 26, 2019 at 1.40 p.m. EET Decisions taken by KONE Corporation`s Annual General Meeting and Board of Directors Matters relating to the Annual General Meeting ...