Japanese Rivals Study Bids for TK Elevator’s European Assets

Japanese elevator makers including Mitsubishi Electric Corp. are among potential suitors set to study bids for European operations being sold by TK Elevator, people with knowledge of the matter said.

EQT AB-owned rival Fujitec Co. is also among possible bidders for the assets, which Kone Oyj aims to sell to clear antitrust approvals for its takeover of TK Elevator, the people said. A deal could fetch around €5 billion ($5.6 billion) or more, according to the people, who asked not to be identified because the information is private.

Kone agreed in April to buy TK Elevator for €29.4 billion from its private equity owners, Advent and Cinven. The European assets are also likely to attract other buyout firms, the people said.

Japanese elevator makers have been seeking to boost their footprint in Europe, where the market is led by Germany’s Schindler Holding AG. A deal would add to the nearly $35 billion in outbound acquisitions by Japanese companies this year, according to data compiled by Bloomberg.

The European operations are set to generate earnings of more than €400 million, the people said.

Deliberations are ongoing, and there’s no certainty who will submit formal bids, the people said. The size of the deal will depend on which assets are ultimately included in the sale following negotiations with the antitrust authorities at the European Commission, the people said.

Representatives for Fujitec and Mitsubishi Electric declined to comment as did spokespeople for EQT, Advent and Cinven. A spokesperson for TK Elevator declined to comment.

“We have always been clear that remedy divestments may be necessary in some geographies to secure regulatory clearance,” a representative for Kone said in a statement. “We remain committed to delivering the estimated €700 million of annual synergies.”