Kone, the Finnish lift and escalator manufacturer, has finalized a colossal €29.4 billion ($34.4 billion) agreement to take over TK Elevator. This strategic move is poised to establish the largest global entity in the elevator and escalator sector. The transaction involves a combination of cash and stock, with the merged enterprise projected to achieve annual revenues of approximately €20.5 billion and employ over 100,000 individuals across more than a hundred nations. A substantial portion, around 65%, of the combined revenue is anticipated to stem from service and modernization agreements, with expected annual cost efficiencies of roughly €700 million within three years post-closure.
Under the terms of the agreement, the holding company, currently managed by Advent and Cinven, will receive €5 billion in cash. The remaining payment will consist of up to 270 million new Kone class B shares, valued at approximately €15.2 billion based on Kone's share price as of April 28, 2026. This comprehensive deal also encompasses the refinancing of most of TK Elevator's existing debt, which amounts to approximately €9.2 billion. The merger is designed to leverage the strengths of both companies, particularly expanding Kone's presence in the Americas, a region where TK Elevator has historically been more active, complementing Kone's established footprint in Asia. The combined portfolio will manage an estimated 3.2 million elevator and escalator units under maintenance globally.
Philippe Delorme, the CEO of Kone, expressed his optimism regarding the merger, stating that the unification would pave the way for a more innovative company, well-positioned for sustained long-term prosperity. Delorme is slated to lead the integrated group, with Ilkka Hara assuming the role of Chief Financial Officer. Antti Herlin, Kone's primary shareholder and chairman of the board, is expected to retain control, holding over half of all voting rights following the completion of the transaction. This consolidation is particularly notable given TK Elevator's history, having been divested from Thyssenkrupp in 2020 through a roughly €17.2 billion buyout by Advent and Cinven, marking one of Europe's most significant private equity exits in recent years.
The proposed merger, however, is not without its challenges. Shareholder support, accounting for approximately 40.3% of Kone's outstanding shares and about 74.3% of its total voting power, has been secured in anticipation of an extraordinary general meeting in June 2026. Yet, the deal faces stringent regulatory scrutiny, with rival Swiss company Schindler indicating its intent to raise antitrust objections. Kone has engaged Bank of America as its financial advisor, while Goldman Sachs advises TK Elevator. Despite potential hurdles, Kone's leadership remains confident in its thorough preparations for the regulatory process, aiming to achieve the strategic objectives of this transformative combination, though the closing is not expected before the second quarter of 2027.
The integration of Kone and TK Elevator promises to reshape the global elevator and escalator landscape, creating a dominant force with enhanced market reach and operational efficiencies. This strategic acquisition underscores a significant shift in the industry, emphasizing service and modernization contracts as key drivers of future growth and profitability.
