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THYSSENKRUPP SELLS ELEVATOR DIVISION

thyssenkrupp agreed to sell its elevator division to a consortium of Advent, Cinven and RAG AG (Germany’s largest coal-mining corporation, also based in Essen) on February 27, Reuters reported. The final price was EUR17.2 billion (US$18.7 billion). After KONE withdrew its bid citing "terms and conditions that are in the best interest of its shareholders, employees and customers" amid reports of worldwide litigation from other OEMs (ELENET 826), the winning consortium prevailed against a rival consortium comprising Blackstone, Carlyle and the Canada Pension Plan Investment Board. thyssenkrupp said it would reinvest about EUR1.25 billion (US$1.37 billion) to take a stake in the unit, which would translate to a 7.3% share that would be used to partially fund its pension liabilities. These plus its debt total EUR16 billion (US$17.57 billion). thyssenkrupp is expected to cut its debt, which will result in a significantly lower annual cash outflow for interest and pension payments. Detailed distribution plans are to be announced in May. thyssenkrupp Elevator will continue to be based in Germany and preserve equal shareholder/labor representation. German metalworkers' union IG Metall, which represents many thyssenkrupp workers, said jobs and sites will be secure until at least March 31, 2027. thyssenkrupp expects the deal to close by the end of the year.

Image credit: courtesy thyssenkrupp

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