Konecranes loses to Kone in Partek deal

For 48 hours it looked like Partek and Konecranes were about to create a Finnish superpower in the field of materials handling. But it is not to be.

KCI Konecranes and Partek announced on 21 May that their respective boards of directors had signed a merger plan. Partek includes the brands Hiab, Nelcon, Moffet and Kalmar. KCI Konecranes makes dockside cranes, EOT cranes and hoists and has increasingly targeted maintenance services.

The merger had been under discussion for several months but was only made public after Kone Corporation, the lift manufacturer that used to be the parent company of Konecranes until a management buyout in 1994, launched a hostile takeover bid for Partek.

The Partek Konecranes merger agreement had got as far as naming the management structure of the new company, to be headed by KCI Konecranes' president and CEO Stig Gustavson.

Kone announced on 20 May that it had made an offer to the State of Finland to buy the 30.2% holding that the State held in Partek. Partek president and chief executive Christoffer Taxell said that the offer was not welcome, had no commercial benefits, and undervalued Partek. Kone had made no approach to the Partek board before making the offer, he said.

Taxell said that a merger with KCI Konecranes, on the other hand, would 'strengthen the industrial structure and bring substantial synergies' and thus had the support of the Partek board.

On 22 May the Ministry for Trade and Industry announced that the State of Finland had decided to sell its stake to Kone. This prompted the resignation of Taxell, who took the government's decision as a clear vote of no confidence in his management of the company. The fact that he was not consulted, combined with the fact that he was also chairman of the Board of the Confederation of Finnish Industry and Employers (from which he also resigned, given the lack of support for him from the government), only increased the damage to his pride.

KCI Konecranes sought support from Kone to allow the merger to continue and even invited it to join in a three way merger. Kone responded by saying that it would not support the merger plan. The boards of directors of KCI Konecranes and Partek concluded that 'there are no possibilities for the merger to be completed under the prevailing circumstances' and they therefore abandoned their merger plan.