FRANKFURT/DUESSELDORF (Reuters) – Finland’s Kone is assessing the viability of a bid for Thyssenkrupp’s 14 billion euro ($15.7 billion) elevators division even as the German conglomerate pursues plans to list it, four people familiar with the matter said.
FILE PHOTO: An elevator shaft is pictured inside Thyssenkrupp’s elevator test tower in Rottweil, Germany, September 25, 2017. REUTERS/Michaela Rehle/File Photo
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.
This is why Thyssenkrupp’s management prefers the option of an initial public offering, the sources added.
“What the company needs is guaranteed proceeds. The IPO is a safe option. Other options are subject to execution risk,” a person familiar with the matter said.
Analysts at Barclays said although the merger would be likely to face opposition from Thyssenkrupp’s labor representatives, a deal with Kone would result in 3-4 billion euros of synergies attributable to the German firm.
“Why give away half the synergies which could be extracted from a potential elevator merger with an IPO of 50% of ET?,” the bank said in a note.
Thyssenkrupp has also said that it is open to partnerships in its other businesses. People close to the matter said that previous talks with gases group Linde over a