Partek Konecranes swiftly abandon merger plans in face of Kone opposition

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

The boards of directors of KCI Konecranes and Partek Corporation have terminated their merger plan.

Konecranes and Partek announced on May 21 that their respective boards of directors had signed a merger plan. Both boards supported the proposed merger.

The merger plan had been under discussion for several months but was only made pubic once 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.

Kone announced on 20 May 20, 2002, that it had made an offer to the State of Finland to acquire the shares in Partek owned by the

State, representing 30.2% of the share capital and votes. 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 Partek CEO and president Christoffer Taxell, who took the government's decision as a clear vote of no confidence in his management of the company. That 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 (which he has also now quit), only increased the damage to his pride.

KCI Konecranes then failed to receive Kone's support for its Partek Konecranes merger plan. KCI Konecranes in fact received written

confirmation from Kone Corporation that it would not support the merger plan when it was put to a forthcoming extraordinary general meeting of Partek shareholders.

The boards of directors of KCI Konecranes and Partek therefore jointly concluded that "there are no possibilities for the merger to be completed under the prevailing circumstances. As a result of this, the Boards of Directors of KCI Konecranes and Partek have decided to terminate the merger plan."