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.


Nissan’s new CEO willing to be fired if no turnaround at Japanese giant

Updated 18 February 2020

Nissan’s new CEO willing to be fired if no turnaround at Japanese giant

  • Makoto Uchida, who took over the top job in December, put his job on the line at the automaker’s shareholders’ meeting
  • Uchida pleaded with shareholders to be patient while he comes up with a plan by May to recover from crumbling profits

YOKOHAMA: Nissan’s new chief executive said on Tuesday he would accept being fired if he fails to turn around Japan’s second biggest automaker which is grappling with plunging sales in the aftermath of the scandal surrounding ex-chairman Carlos Ghosn.
Makoto Uchida, who took over the top job in December, put his job on the line at the automaker’s shareholders’ meeting, where he faced demands ranging from cutting executive pay to offering a bounty to bring Ghosn back to Japan after he fled to Lebanon.
Nissan’s worsening performance has heaped pressure on Uchida, formerly Nissan’s China chief who became its third CEO since September, to come up with aggressive steps to revive the company.
On Tuesday, Uchida, who was repeatedly heckled by shareholders, said he was ready to face dismissal if he failed to improve profitability at the company, which is on course to post its worst annual operating profit in 11 years.
“We will make sure that we steer the company in an effective way so that it is visible in the eyes of viewers. I will commit to this: if the circumstances remain uncertain you can fire me immediately,” he said.
Uchida, 53, did not give a timeframe for improving Nissan’s performance.
The new boss must prove to the board he can accelerate cost-cutting and rebuild profits at the 86-year-old Japanese giant, and that he has the right strategy to repair its partnership with France’s Renault, sources have told Reuters.
Uchida pleaded with shareholders to be patient while he comes up with a plan by May to recover from crumbling profits and a corporate shake-up following Ghosn’s arrest in Japan in late 2018 over financial misconduct charges.
“If you can be patient a little bit longer, on a day-to-day basis you will be able to sense we are changing,” he said.
Ahead of the meeting, some shareholders demanded more clarity about Uchida’s plan.
“I just want to know what the plan for recovery is. At the moment, the share price has dropped again, and the value of the company has plummeted,” said a 70-year-old former employee who owns shares in the company.
“If this is the situation, part of me thinks that we would be better off with Ghosn ... If we don’t get a clearer vision of the path the company is taking, it will be a worry.”
Nissan’s shares are trading around their lowest level in more than a decade following its latest earnings.
Last week, Nissan cut its dividend outlook to its lowest since the 2011 financial year, after dwindling car sales drove the company to post its first quarterly net loss in nearly a decade.
Shareholders gathered at the extraordinary meeting in Yokohama to vote in new directors including Uchida and Chief Operating Officer Ashwani Gupta.
Their appointments highlight a changing of the guard at Nissan, as shareholders were also voting on motions for former company stalwarts, CEO Hiroto Saikawa and COO Yashuhiro Yamauchi, to leave their board director positions.