Atlas Copco propose to split the Group

Published 2/3, 2017 at 13:08

Atlas Copco will propose at the Annual General Meeting 2018 on a split of the Group into two listed companies, Atlas Copco and NewCo (working name), and to distribute NewCo to the shareholders.

NewCo will focus on mining and 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 approximately 12,000 employees and had pro forma revenues of €3bn 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 €7.9bn and an operating margin of about 20% for the 12 months ended 30 September 2016.

“The Board and management believe that long-term shareholder value will be created by splitting the Group into two separate companies,” said Atlas Copco Chairman Hans Stråberg. “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 Atlas Copco Group president and chief executive Ronnie Leten. “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 is planned 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 AB on the Nasdaq Stockholm stock exchange in the second quarter 2018.

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