Proposed Acquisition of Vertical Topco II S.A. by KONE Oyj

Reference:

CCS 400-140-2026-022

Notifying Party:

(a)   KONE Oyj (“KONE”);

(b)  Vertical Topco I S.A. (“Vertical Topco I”); and

(c)   Vertical Topco II S.A. (“Vertical Topco II”),

Legal Representative(s):

Rajah & Tann Singapore LLP

Notifying Date:

10 September 2026

Summary of Transaction:

1.     the names of the merger parties;

(a)   KONE Oyj (“KONE”) (“Buyer”); and

(b)  Vertical Topco II S.A. (“Vertical Topco II”) (“Target”)

(collectively, the “Parties”).

2.     a description of the transaction;

The notification relates to the proposed acquisition by the Buyer of the entire issued share capital of the Target from Vertical Topco I S.A. (“Seller” or “Vertical Topco I”) (the “Proposed Transaction”).

3.     a description of the business activities of the merger parties worldwide and in Singapore;

Buyer

KONE is a Finnish multinational engineering company that specializes in elevators, escalators, and automatic building doors. Founded in 1910 and headquartered in Helsinki, KONE operates globally, employing over 60,000 people across 70 countries. KONE is listed on the official list of Nasdaq Helsinki, and ultimately controlled by its principal shareholder, Mr Antti Herlin and entities controlled by him. 

In Singapore, the Buyer operates by way of its Singapore subsidiary, KONE Pte Ltd and trades under the brand name “KONE”. 

Target

The Target is a holding company that is ultimately jointly controlled by private equity firms Advent International, L.P. and its affiliates and Cinven VII, managed by Cinven Limited. The Target has a wholly-owned subsidiary TK Elevator GmbH (“TKE”) which is registered in Germany, and a wholly-owned subsidiary TK Elevator Singapore Pte. Ltd., which is registered in Singapore. 

TKE is a German multinational engineering company active in the design, installation, and maintenance of elevators, escalators, walkways, lifts, passenger boarding bridges, stairlifts, and platform lifts. Founded in the 1860s and headquartered in Dusseldorf, TKE operates globally, employing around 50,000 employees, thereof 25,000 service technicians and over 1,000 support centres globally. In Singapore, TKE trades under the name “TK Elevator Singapore Pte. Ltd.”. 

4.     a description of the overlapping goods or services, including brand names;

KONE and TKE overlap in the supply of the following:

(a)     New installation (“NI”) of elevators;

(b)     Modernization (“MOD”) of elevators;

(c)     Maintenance and repair (“SER”) of elevators;

(d)     NI of escalators;

(e)     MOD of escalators; and

(f)      SER of escalators.

5.     a description of substitute goods or services from demand-side and supply-side considerations;

From a demand-side perspective, the Parties submit that the relevant substitutes for the NI, SER and MOD of elevators and escalators provided by KONE and TKE include the respective corresponding services provided by their competitors, which include other global OEMs, regional OEMs and independent service providers (“ISPs”). 

From a supply-side perspective, the Parties submit that there are no substitutes for the NI, SER and MOD of elevators and escalators provided by KONE and TKE. 

6.     the Applicant’s views on:

      i.     definition of the relevant market(s)

The Parties submit that the relevant markets in relation to elevators are: (i) NI of elevators in Singapore; (ii) SER of elevators in Singapore; and (iii) MOD of elevators in Singapore.

The Parties submit that the relevant markets in relation to escalators are: (i) NI of escalators in Singapore; (ii) SER of escalators in Singapore; and (iii) MOD of escalators in Singapore.

    ii.     the way in which competition functions in this market;

Elevators in Singapore

NI of elevators in Singapore is typically procured through structured competitive tender processes which entail technical and commercial comparisons across price, specification, lead time and lifecycle cost, frequently with multiple bidding rounds in which shortlisted bidders are invited to refine their offers in response to feedback. A material proportion of awards is made under public procurement rules or institutional procurement frameworks that mandate competitive tendering and prescribe minimum bidder counts. 

MOD of elevators in Singapore are commissioned discretely at fixed scope on a per-project basis. Customers routinely solicit multiple bids for MOD projects and run structured technical and commercial evaluations at each award. 

SER of elevators in Singapore are time-limited and re-tenderable, with customers routinely seeking competing quotes from alternative providers at each renewal or service engagement. Apart from price, competition centers on factors such as network density, response times, workforce utilization, and the breadth of the installed base under service. 

Escalators in Singapore

Like NI of elevators in Singapore, NI of escalators in Singapore are also typically procured through structured competitive tender processes, with multiple bids solicited and structured technical and commercial evaluations conducted at each award (and often under public procurement rules). 

Like MOD of elevators in Singapore, MOD projects for escalators in Singapore are commissioned discretely at fixed scope on a per-project basis, frequently through structured competitive tender processes (and often under public procurement rules). 

Like SER of elevators in Singapore, SER contracts for escalators in Singapore are finite in duration and routinely subject to competitive sourcing at renewal — frequently through structured multi-bidder tenders (and often under public procurement rules) or through less formal competitive sourcing. 

  iii.     barriers to entry and countervailing buyer power; and 

Barriers to entry

NI of elevators and escalators in Singapore - Barriers to entry in NI of elevators and escalators have lowered as ISPs can compete with large OEMs by sourcing commoditized components from low-cost Chinese manufacturers and assembling a competitive NI proposition locally. The competitive constraint exerted by the ISPs has intensified materially in recent years, and the number of ISPs competing for NI elevator and escalator tenders in Singapore has grown substantially. 

SER of elevators and escalators in Singapore - Barriers to entry in SER of elevators and escalators are low. Entry requires limited upfront investment due to the following:

(a)   The limited equipment required to service elevators and escalators are readily available on a short-term hire basis;

(b)  The activity is not capital-intensive and exhibits no minimum efficient scale of competitive significance; and

(c)   Mature third-party component supply chains have reduced OEMs’ historical technology advantage in recent years. 

The main requirements for new entrants are the cost of recruiting certified service technicians and compliance with the relevant national certification regimes. 

MOD of elevators and escalators in Singapore – Barriers to entry in MOD of elevators and escalators are low due to the following: 

(a)   The same factors that lower barriers to entry into SER apply to MOD of elevators and escalators;

(b)  Fixed-cost overheads are low as a small team of certified installation engineers, supported by sub-contracted labour, is sufficient to deliver MOD projects of typical scope;

(c)   MOD projects are typically structured around discrete component packages, each of which is available from specialist component manufacturers and low-cost Chinese commodity suppliers; and

(d)  The modular structure of MOD scope allows new entrants to readily compete by assembling the relevant components, without need for in-house manufacturing capability.

Countervailing buyer power 

The Parties submit that customers in all six relevant markets have strong countervailing buyer power due to the following: 

(a)   Larger customers are aware of the comparative offerings of the OEMs and ISPs and they consolidate their MOD or SER needs across multi-asset portfolios to negotiate competitive pricing and terms;

(b)  No to low switching costs since NI and MOD of escalators and elevators are procured on a per-project basis, and SER contracts are typically structured with break rights or short renewal cycles;

(c)   Technical work performed across OEMs and ISPs is functionally interchangeable; and

(d)  Certified service technicians are widely available across the supplier base, and customer data (such as service history and asset records) is portable between providers. 

   iv.     the competitive effects of the merger (non-coordinated, coordinated, vertical and/or conglomerate effects, as relevant). 

Non-coordinated effects

The Parties submit that the Proposed Transaction will not give rise to non-coordinated effects in any of the relevant markets, given a low increment in market shares, intense competition from strong competitors such as Otis, Schindler, Fujitec, Hitachi, and Mitsubishi, low barriers to entry for new competitors, strong countervailing buyer power and mandatory safety and inspection regimes that guarantee minimum service quality. 

Coordinated effects

The Parties submit that the Proposed Transaction will not give rise to coordinated effects in any of the relevant markets as existing market players face intense competition. Contracts vary materially in size, technical specification and procurement process across NI, SER and MOD and there are no transparent reference prices that would enable rivals to monitor deviation from any putative coordinated outcome. Any attempted coordinated price increase would in any event be defeated by the ISPs, which would capture market share at contract renewal.

Vertical and conglomerate effects

The Parties submit that the Proposed Transaction will not give rise to any vertical effects in any of the relevant markets as there are no vertical relationships between the Parties’ activities in elevators and escalators. 

The Parties submit that the Proposed Transaction will not give rise to any conglomerate effects as the Proposed Transaction does not increase the scope of services provided by KONE or TKE. 

Consultation:

Interested parties are invited to submit their views on the Proposed Transaction. When submitting confidential information, interested parties should take note of the procedures outlined in the CCS Guidelines on Merger Procedures. 

Comments should reach CCS no later than 20 October 2026, 5 p.m. Please write or email your comments (titled: Comments on the proposed acquisition between KONE Oyj, Vertical Topco II S.A and Vertical Topco I S.A ) to: 

Email: ccs_consultation@ccs.gov.sg

Attention: Theong Li Han, Assistant Director (Legal and Enforcement Division)

Supporting Documents

Interested third parties may request in writing to obtain more information on the Proposed Transaction. 

Please write or email your submission (titled: Comments on the proposed acquisition between KONE Oyj, Vertical Topco II S.A and Vertical Topco I S.A) to the above contact details.