Thyssenkrupp in line for $4 billion payday in Kone-TK Elevator deal
Thyssenkrupp's Potential Windfall from Kone-TK Elevator Acquisition
By Christoph Steitz
Overview of the Proposed Deal
FRANKFURT, April 29 (Reuters) - Thyssenkrupp stands to win big in Kone's proposed $34.4 billion purchase of liftmaker TK Elevator (TKE), with analysts putting the German company's share of the proceeds at nearly two-thirds of its market capitalisation.
Estimated Financial Impact
The windfall if the deal goes through would amount to as much as 3.4 billion euros ($4 billion), according to estimates from Jefferies and JPMorgan, a financial boon for the German business which is going through a major restructuring to change into a holding company.
Market Reaction and Company Response
Thyssenkrupp, whose shares were up 7.5% at 1437 GMT, did not comment on what the deal meant financially, only saying it was examining the proposal, under which Kone would become the world's largest lift maker.
Background on Thyssenkrupp's Stake in TKE
The company said in December that its 16.2% stake in TKE, retained after a landmark sale of the division to a consortium led by Advent and Cinven in 2020, had a book value of around 2 billion euros.
Analyst Perspectives
Analysts at Jefferies called it a "clear positive for Thyssenkrupp, delivering long-awaited value crystallisation from a non-core asset and materially improving transparency".
Breakdown of the Deal Terms
Shareholder Proceeds
Under the terms of the deal, TKE's shareholders will receive 5 billion euros, equating to 810 million euros for Thyssenkrupp based on its TKE stake.
Additional Benefits for Thyssenkrupp
In addition, Thyssenkrupp stands to receive up to 2.46 billion euros in newly issued Kone shares, according to the terms, which would give it a 5.5% stake in the combined Kone-TKE entity, according to Reuters calculations.
Exchange Rate Information
($1 = 0.8545 euros)
Reporting Credits
(Reporting by Christoph Steitz; editing by Matthias Williams and Keith Weir)
