KONE acquires Partek and splits with Cargotec
KONE had continued to acquire companies long after the major acquisitions of the 1970s were integrated into the organization, but most of the new companies were small service companies with local market coverage. Then, in 2002, KONE carried out a lightening-swift attack that resulted in the acquisition of Partek, a Finnish conglomerate. Like the legendary ASEA and Westinghouse deals, the acquisition of Partek involved taking over a company bigger than KONE.
Many wondered why Antti Herlin was buying a company deeply involved in businesses – such as cranes and materials handling – that his father had divested less than ten years earlier. The answer lay in a combination of tax regulations and simple mathematics. On the one hand, the family’s inheritance was so deeply tied up in KONE shares that it could not be divided up among Pekka Herlin’s five children without having to sell the company. On the other, Partek was available at a price so far below the value of its various parts that it presented too good an opportunity to pass up. Within little more than two years, KONE had reorganized Partek’s companies into a new company, Cargotec, whose shares were held by the other Herlin children. Antti retained principal ownership of a KONE whose worth had been doubled in the process.
During these years, KONE also took important steps to expand operations in the rapidly growing markets of China, India, Russia and the Middle East. It also extended its strategic alliance with Japan’s Toshiba Elevator and Building Systems Corporation. This cooperative relationship was topped off with the installation of KONE EcoDisc® hoisting machines in all but two of the elevators in the world’s tallest building, the Taipei Financial Center in Taiwan.