Atlas Copco to split business into two listed companies from Q2 2018
First publishedon www.AggBusiness.com
Atlas Copco plans to split its business into two listed companies from 2018.
NewCo (working name) will focus on mining/civil engineering customers and include the existing Mining and Rock Excavation Technique business area and the Construction Tools division with related service operations. This business has around 12 000 employees and had pro forma revenues of €3 billion and an operating margin of about 16% for the 12 months ended 30 September 2016.
Atlas Copco will focus on industrial customers and include the Compressor Technique, Vacuum Technique and Industrial Technique business areas plus the Portable Energy division, including service, and the Specialty Rental division. This business has approximately 33,000 employees and pro forma revenues of €7.9 billion and an operating margin of about 20% for the 12 months to 30 September last year.
“The Board and Management believe that long-term shareholder value will be created by splitting the Group into two separate companies,” said Hans Stråberg, chair of the board of directors of Atlas Copco. “Both businesses are global leaders in their respective fields and will benefit from a more focused management responsibility.”
Ronnie Leten, president and CEO of the Sweden global headquartered Atlas Copco Group, added: “The two businesses have different demand drivers and demand characteristics. A split will increase their respective abilities to add value to customers, grow the business and attract talent.”
If the shareholders decide in favour of the proposal, the split of the Group is planned to be done through a share distribution, whereby Atlas Copco’s shareholders will receive shares in NewCo in proportion to their existing shareholding. The intention is to list NewCo on the Nasdaq Stockholm stock exchange in Stockholm, Sweden, in Q2 2018.
The distribution of NewCo is foreseen to meet the requirements of Lex Asea, meaning that the Swedish-based shareholders of Atlas Copco are taxed only on the value of the shares received when they sell them.
News of the proposed Atlas Copco Group switch to two listed companies comes in the same week as the French-based Fayat Group announced its agreement to buy Atlas Copco’s Dynapac Road Construction Equipment Division, which includes compactors for asphalt and soil applications, as well as asphalt pavers and planers. The acquisition is subject to regulatory approvals and is expected to be completed in Q2 2017.