The elevator business is about to get a lot less crowded, if regulators allow it.
Kone, the Finnish elevator maker, announced in late April that it would buy rival TK Elevator for €29.4 billion, or $34.4 billion. That is the largest transaction in Finland's history, and it would combine the world's third and fourth largest elevator companies into one giant that would surpass both Otis Worldwide and Schindler Holding.
Kone said on Tuesday that the Justice Department's antitrust division is now investigating whether the deal would hurt competition in the U.S. market. The review is still in its early stages, according to sources, after the DOJ asked both companies for more information on Monday. These kinds of in-depth reviews can stretch past a year.
The company says it has cooperated with the DOJ since the deal was announced and expects to work with regulators globally. "We are confident in the benefits this combination will bring to customers and look forward to delivering those benefits following closing," Kone said in a statement.
This is not just another corporate merger. It is one of the largest private equity exits in recent memory, as buyout firms face mounting pressure to sell off assets and return cash to their investors.
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TK Elevator is currently owned by Advent and Cinven, two private equity firms that won control of the company back in 2020. Kone had actually tried to buy TK Elevator that same year with CVC Capital Partners as a partner, but Advent and Cinven outbid them. Now Kone is finally getting its prize, assuming regulators let it through.
For Kone, this deal fulfills a long-standing ambition to expand in the U.S., where TK Elevator has a strong installation and service business. That matters because Kone already gets about 35% of its revenue from Asia, and a bigger U.S. footprint would balance things out.
The catch: antitrust review is the biggest risk hanging over this deal. The DOJ under President Trump's second term has generally preferred to settle with companies rather than sue them, but it recently forced a U.S. defense contractor to abandon a deal entirely when faced with a lawsuit. That shows the current administration is willing to play hardball when it wants to.
In June, Kone's CFO Ilkka Hara indicated the firm would divest certain assets to ease regulatory worries, without providing details.
If you own elevators, you might be wondering what any of this has to do with your money. Fair question.
The answer is that this deal is a test of how willing regulators are to let big companies get bigger. If Kone and TK Elevator are forced to make major concessions or walk away entirely, it could signal a tougher environment for large mergers across industries. That affects the value of companies you might hold, especially in sectors where consolidation has been driving stock prices higher.
It also means the elevator business itself could look very different in a few years. A combined Kone-TK Elevator would control a massive share of the U.S. market, which could change pricing and service options for buildings that rely on these companies. If you invest in real estate or own shares in companies that manage large properties, that is worth watching.
For now, Kone is sticking to its timeline. The DOJ, Kone, TK Elevator, and the private equity owners Advent and Cinven all declined to comment on the review.
The next year or so will tell us whether this merger becomes the new normal for the industry or a cautionary tale about big deals in a tougher regulatory climate. Either way, it is a story worth following.
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