Thyssenkrupp-Kone elevator merger ‘would trigger legal war’ Schindler

ThyssenKrupp elevators at its headquarters in Essen, western Germany. Thyssenkrupp went deeper into the red in its 2018-19 fiscal year. (AFP)
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Updated 14 February 2020

Thyssenkrupp-Kone elevator merger ‘would trigger legal war’ Schindler

  • Abu Dhabi sovereign fund consortium also said to be in running for company

FRANKFURT: Swiss elevator maker Schindler would embark on an all-out antitrust offensive in the courts to stall any deal to combine Thyssenkrupp’s lift division with rival Kone, board member Alfred Schindler told Reuters.

His comments came a day after the deadline for bids for Thyssenkrupp Elevator, with Finland’s Kone and three private equity consortia vying to buy it in a deal sources say could be worth up to $18.6 billion.

A Kone-Thyssenkrupp Elevator merger would create the world’s biggest lift maker, leapfrogging market leader Otis, and Schindler in second place.

“We would probably file lawsuits in Europe, the United States, Canada, China and possibly Australia. These cases would take at least three to four years,” said Schindler, who is now chairman emeritus of the company he ran for 26 years. He said that other rivals would probably take legal action too: “You can safely assume that neither Otis nor Schindler will simply accept being driven out.”

Thyssenkrupp and Otis declined to comment. A Kone spokeswoman said it believed there was room for consolidation in the sector. Shares in Kone fell as much as 3.9 percent after Schindler’s comments while Thyssenkrupp rose slightly.

Once a symbol of Germany’s industrial power, Thyssenkrupp is struggling with €12.4 billion (13.5 billion) of debt and pension liabilities after years of ill-fated investments, and needs to raise money from its prized elevator division to restructure. Thyssenkrupp’s supervisory board is due to meet on Feb. 27 and a decision on the fate of the elevator business could be made then, two people familiar with the matter said.

Besides selling all or part of the business, Thyssenkrupp is considering an initial public offering, though sources said this option was less likely. Solely based on bids, Kone and a consortium of Blackstone, Carlyle and the Canada Pension Plan Investment Board look best-placed to reach the final round but no decision has been made, the people said.

Kone has made a non-binding bid of €17 billion while the consortium has offered about €16 billion. It was not clear whether Kone had improved its earlier offer. A consortium comprising Advent, Cinven and the Abu Dhabi Investment Authority and an alliance between Canada’s Brookfield and Singapore’s Temasek are also in the running, sources have said.

While a sale to Kone would probably raise the most cash for Thyssenkrupp, the beleaguered conglomerate is concerned it could trigger antitrust investigations where the combined company would be a major player, such as Europe and the US. “Such a hypothetical takeover would . . . have considerable effects on the structure of the relevant markets and most likely lead to significant negative impacts on effective competition in many markets,” a DICE Consult report said.

Kone has drawn up plans to hand Thyssenkrupp’s European assets to private equity firm CVC but the European Commission typically prefers industrial buyers that can compete better with the firm offloading assets.


Dubai to support Emirates airline, closes tourist market

Emirates airline is vital to the Dubai and UAE economy. (Shutterstock)
Updated 4 min 39 sec ago

Dubai to support Emirates airline, closes tourist market

  • Dubai’s Crown Prince Sheikh Hamdan bin Mohammed said the emirate’s government would inject fresh equity into the Emirates airline, considering its strategic importance to the Dubai and UAE economy

DUBAI: Dubai said on Tuesday it would help its state-run Emirates airline overcome the damaging impact of the coronavirus outbreak and enforced a full lockdown on a district famous for its gold and spice markets.
The UAE, the region’s tourism and business hub, has taken drastic measures to combat the spread of the virus including temporarily halting passenger flights and launching a nationwide disinfection drive.
It had already extended a nightly curfew to April 5 to deep clean the country, but Dubai announced late on Monday that a 24-hour curfew would be imposed on the normally bustling tourist and trade district of Al Ras for two weeks.
“I am glad they are doing this because it is for our protection,” said one rice trader who works in Al Ras but resides in the UAE’s Sharjah emirate. The trader, who declined to be named, told Reuters he is now conducting business online.
Dubai closed the main road entrances to Al Ras and halted public transport to the area, which abuts Dubai Creek, where dhows have been banned from shipping goods between Dubai and Iran, a regional epicentre for the virus. Authorities would provide residents with essential needs, the Dubai Media Office said.

HIGHLIGHTS

● Dubai to inject fresh capital into state airline.

● Historic Dubai tourism and trade district under lockdown.

● Coronavirus cases pass 3,700 in the six Gulf Arab states.

The UAE has confirmed 611 coronavirus cases, with five deaths. It plans to open more drive-thru testing centres after the first was opened last week in the capital, Abu Dhabi.
“We will never hesitate to take any measures against any potential threat to people’s life. At the same time, we won’t let development grind to a halt,” Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan, the country’s de facto ruler, said in comments carried on state media.
Dubai’s Crown Prince Sheikh Hamdan bin Mohammed said the emirate’s government would inject fresh equity into the Emirates airline, considering its strategic importance to the Dubai and UAE economy.
The total number of infections in the six Gulf Arab states stands at more than 3,700, with 18 deaths.
In Kuwait, the first Gulf state to halt passenger flights and impose a partial curfew, the health minister said a clearer picture on the success of containment efforts would emerge by early June “If infection numbers stabilize, there may be a gradual easing of current measures,” Basil Al-Sabah told Al Rai newspaper. “But if the average rate of transmission increases then ... I do not rule out the cabinet enforcing a full curfew.”
Kuwait recorded 23 new infections on Tuesday to take its total to 289. Saudi Arabia, has passed 1,400, with eight deaths.