Atlas Copco to split in 201813 February 2017
Sweden – Tunnelling machinery manufacturer Atlas Copco has begun working towards splitting its business. It will present the proposal to form Atlas Copco and “NewCo” which it said is a working name.
NewCo will focus on the mining and civil engineering sectors and include the existing Mining and Rock Excavation Technique business area and the Construction Tools division with related service operations. This business has approximately 12,000 employees and had pro forma revenues of SEK 28bn (USD 3.2bn).
Atlas Copco will focus on industrial customers and include the compressors, vacuums and industrial business areas plus its portable energy division, including service, and the specialty rental division. This business has approximately 33,000 employees and revenues of SEK 74bn (8.45bn).
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 AB’s shareholders will receive shares in NewCo AB in proportion to their existing shareholding. The intention is to list NewCo AB on the Nasdaq Stockholm stock exchange in Stockholm, Sweden, in the second quarter 2018.
“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 AB. “Both businesses are global leaders in their respective fields and will benefit from a more focused management responsibility.”
“The two businesses have different demand drivers and demand characteristics,” said Ronnie Leten, President and CEO of the Atlas Copco Group. “A split will increase their respective abilities to add value to customers, grow the business and attract talent.”