KONE announced in May 2011 that it had agreed to acquire a further 40% stake in its Chinese joint venture GiantKONE Elevators Co., Ltd. (“GiantKONE”) from Zhejiang Giant Holdings Co., Ltd. (“Giant Holdings”), increasing KONE’s shareholding in GiantKONE from 40% to 80%. All conditions for the transaction have been fulfilled and the transaction has been successfully completed on December 1, 2011. KONE has paid the purchase price of RMB 950 million in full to Giant Holdings.
As a result of this transaction, KONE becomes the majority shareholder of GiantKONE. KONE will consolidate GiantKONE as of December 1, 2011. Giant Holdings continues as a shareholder of GiantKONE with a 20% stake. The transaction includes an option for KONE to buy and a respective option for Giant Holdings to sell the remaining 20% stake in GiantKONE to KONE. Giant KONE will continue doing business as a separate entity under the GiantKONE brand.
In accordance with IFRS 3, KONE will book a one-off gain of approximately EUR 65 million related to the revaluation of the 40% stake held by KONE prior to the transaction. This revaluation will be recorded under the share of associated companies' net income.
The consolidation of the transaction is not expected to have a material impact on KONE’s sales in 2011. As a result of IFRS 3 adjustments such as intangible asset amortizations and transaction costs, the consolidation of the transaction is expected to have a marginal negative impact on KONE’s operating income in 2011 and a marginal positive impact on KONE’s operating income in 2012.
KONE is one of the global leaders in the elevator and escalator industry. The company has been committed to understanding the needs of its customers for the past century, providing industry-leading elevators, escalators and automatic building doors as well as innovative solutions for modernization and maintenance. The company’s objective is to offer the best people flow experience by developing and delivering solutions that enable people to move smoothly, safely, comfortably and without waiting in buildings in an increasingly urbanizing environment. In 2010, KONE had annual net sales of EUR 5 billion and approximately 33,800 employees. KONE class B shares are listed on the NASDAQ OMX Helsinki Ltd in Finland.
For further information, please contact:
Investors and analysts:
Karla Lindahl, Director, Investor Relations, tel. +358 204 75 4441
Anne Korkiakoski, Executive Vice President, Marketing and Communications, tel. +358 50 67 411
Read the press release from May 9, 2011: KONE to strengthen its position in China by increasing its ownership in Giant KONE to 80%
Matti Alahuhta, President and CEO
Klaus Cawén, Executive Vice President, M&A and Strategic Alliances, Russia and Legal Affairs