KONE Corporation and TKE have announced an agreement to combine in a cash and share transaction implying a total enterprise value for TKE of €29.4 billion. The deal brings together two of the world’s leading elevator and escalator companies, with KONE entering the agreement with a consortium led by Advent and Cinven, the current owners of TKE. Completion is subject to regulatory approvals and KONE shareholder approval and is expected no earlier than the second quarter of 2027.
On a combined basis, the two companies would generate approximately €20.5 billion in annual sales, of which approximately 65% would come from service and modernization, and more than €2.7 billion in adjusted EBIT excluding synergies. The combined group would maintain approximately 3.2 million units under maintenance worldwide. Annual run-rate synergies are estimated at approximately €700 million, expected to be realized through higher density of service networks, enhanced R&D capabilities, platform optimization, procurement efficiencies, and selling, general, and administrative savings. The transaction is expected to be accretive to KONE’s earnings per share in the first full year post-completion.
KONE’s current President and CEO Philippe Delorme will lead the combined group, with Ilkka Hara as CFO and Antti Herlin remaining as Chairman of the Board with voting rights representing over 50% of KONE’s shares, ensuring continuity of long-term strategic focus. Advent and Cinven, through their jointly controlled holding company, will have the right to nominate two members of KONE’s Board of Directors following completion, one of whom will serve as co-vice chair. The transaction resets KONE’s long-term financial targets, with synergies supporting an ambition to accelerate adjusted EBIT margin progression substantially beyond KONE’s current standalone target of 16%.
KEY QUOTES:
“By uniting, we are laying the foundation for an even more innovative company, well positioned for long-term success. This combination would meaningfully enhance our ability to meet customers’ growing demand for reliable and sustainable solutions and services in a rapidly evolving environment, while creating a stronger, more diverse global team grounded in the combined expertise of both organizations.”
Philippe Delorme, President and CEO, KONE
“This transaction reflects the Board’s clear ambition to create the strongest possible foundation for long-term value creation. We are confident that it would ultimately drive greater innovation and improved customer service, while positioning the combined group for sustainable growth.”
Antti Herlin, Chairman of the Board, KONE
“Four years ago, we set out to build something genuinely great — a business defined by operational excellence, customer trust, and the conviction that extraordinary people, given the right tools and leadership, will always outperform. Together we will bring the very best of both companies to our customers, our people, and the cities we serve.”
Uday Yadav, CEO, TKE
“TKE’s journey has been an extraordinary one. Together with TKE’s management team and employees, we are proud to have actively supported its carve-out and transformation into the world-class strategic platform it is today. The planned combination with KONE provides a unique opportunity to accelerate the successful journey of innovation in urban mobility.”
Bruno Schick, Co-Managing Partner, Cinven
“Since acquiring TKE in 2020, we partnered closely with management and employees to navigate a complex carve-out and build a highly resilient, focused business. Moving forward, we see compelling industrial logic in combining two highly complementary businesses and creating a world-class company in the elevator and escalator industry.”
Ranjan Sen, Managing Partner, Advent
