February 25, 2020 / 11:37 AM / a month ago

UPDATE 2-Kone seeks to profit from changes at rival Thyssenkrupp -CEO

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HELSINKI, Feb 25 (Reuters) - Finnish lift maker Kone will seek to profit from planned ownership changes at German rival Thyssenkrupp’s elevator unit, Kone Chief Executive Henrik Ehrnrooth told the company’s annual general meeting on Tuesday.

“This is our clear goal, to see how Kone can profit from this (situation),” Ehrnrooth said, referring to possible turbulence caused by the ownership change over the next few years and in addition to pursuing Kone’s existing strategic goals.

Last week, Thyssenkrupp decided to drop Kone from the bidding process for its elevator business, opting to prioritise talks with two groups of financial investors.

Ehrnrooth also said Kone had “closed books” for Thyssenkrupp’s elevators now and had no plans to look at a possible deal later.

He said the risks related to the acquisition had become larger than the opportunities.

“I believe this too is a very good situation for us,” he added.

None of the shareholders present at the meeting expressed disappointment at the company’s decision to pull out of the bidding contest, with one voicing suspicion that the German rival had “become greedy” during the sales process.

Ehrnrooth told shareholders the largest growth opportunities for Kone going forward lay in maintenance services as well as in modernization of old equipment.

“China and the rest of Asia are becoming a very interesting market for us in modernization,” he said, referring to the fact that many lifts and escalators in the region were reaching the age limit of 20 years when they often need to be modernized.

Kone expects a significant negative financial impact from coronavirus, Ehrnrooth said, without giving any numbers.

“At our largest factory in China’s Kunshan, operations are up and running but logistics pose the largest restrictions,” he said, referring to disrupted traffic between provinces.

As proposed, the annual general meeting elected Sanoma chief executive Susan Duinhoven as a new member of its board of directors. (Reporting by Anne Kauranen, editing by Nick Macfie and David Evans)

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