How a mega-deal will transform the lift industry
Together Kone and TKE will tower over their rivals
Debate over the most momentous developments in transport usually centres on the car, train or plane. Lifts, without which modern high-rise cityscapes would not exist, are typically (and unfairly) overlooked. Every day the world’s urbanites rely on them to travel to heights or depths that would otherwise be inaccessible. Four firms make most of those journeys possible. And on April 29th two of them, Finland’s Kone and Germany’s tkE, announced that they would combine to form the world’s biggest liftmaker.
Kone will pay €5bn ($5.8bn) in cash and give €15.2bn-worth of shares in the merged business to Advent and Cinven, a pair of private-equity firms that five years ago led a consortium to acquire TKE for €17.2bn. Kone, working with CVC, another private-equity outfit, had also bid for the business at the time. Now it will benefit from TKE’s stint in private-equity hands, which has forced it to become more competitive. The deal, which the Finnish firm claims will yield cost savings of €700m a year, brings together businesses with neatly complementary strengths.
The new company will tower over its industry, with a global market share of some 28%, according to Jefferies, an investment bank. That will place it several floors above America’s Otis, the current leader with 18% of the market, and Switzerland’s Schindler, which had vied for second place against Kone with 15%.
A slump in construction in China, where half the world’s 20m lifts keep vast cities on the move, has lately weighed on global sales of new lifts. But these tend not to be the most lucrative source of revenue for the industry. Of the $110bn spent on lifts in 2025, new ones accounted for just $33bn of the total, compared with $61bn for servicing and $16bn for modernisation, estimates Roland Berger, a consultancy. After a two-year warranty period, service contracts are typically renewed every two years for the 15-20 year life of a lift, after which it requires modernisation. At the end of that period around 40% of lifts are still serviced by the original seller.
Roland Berger reckons that the share of revenue the industry generates from sales of new lifts will fall over the remainder of the decade, hold steady for servicing and continue to rise for modernisation. Kone thinks that worldwide there were 10m lifts over 15 years old in 2024, and that the figure will rise to around 16m by 2030, with 300,000 a year in line for anything from a minor upgrade to full refurbishment.
That presents a big opportunity for the combined business. Kone is already a leader in servicing and modernisation, with 19% of revenue coming from doing up old lifts, compared with an average of 15% for the rest of the pack, according to Bernstein, a broker. Merging with TKE will expand its service network in complementary ways. Both companies have sizeable footprints in Europe but Kone is stronger in China, whereas tke has a larger presence in America. If the new company can successfully combine the two service networks its technicians will each have more lifts to maintain, boosting productivity and profits.
No wonder rivals feel shafted. Schindler’s boss, Paolo Compagna, has called the likely outcome of the merger a “bloodbath” and has promised to ensure that antitrust authorities around the world scrutinise the deal. Otis is said to be equally troubled. At home in Europe, however, Kone may find trustbusters to be unusually open to the idea. The European Commission has signalled that it intends to rework its merger guidelines to make it easier for companies to buy one another and create “European champions”. Blessing a tie-up between Kone and TKE offers a test of its commitment to the cause. In an industry noted for its ups and downs, Kone may soon be in the ascent. ■