Atlas Copco Board of Directors proposes to split the Group in 2018

Published 16/1 at 11:41

Atlas Copco will initiate work in order to propose to the Annual General Meeting 2018 to decide on a split of the Group into two listed companies, Atlas Copco and “NewCo” (working name), and to distribute NewCo to the shareholders.

Atlas Copco Board of Directors proposes to split the Group in 2018

Atlas Copco will initiate work in order to propose to the Annual General Meeting 2018 to decide 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/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 BSEK 28 (BEUR 3.0) and an operating margin of about 16% for the 12 months ended September 30, 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 BSEK 74 (BEUR 7.9) and an operating margin of about 20% for the 12 months ended September 30, 2016.

“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.”

If the shareholders decide in favor 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.

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