Atlas Copco to split in two, appoints new CEO
Swedish mining equipment and compressor maker Atlas Copco (STO:ATCO-A) has announced plans to split the group into two listed companies next year, a move that could attract takeover offers.
Atlas, Sweden’s largest industrial group, wants to spin off its mining and construction tools division, with annual sales of roughly 28 billion kronor ($3.1 billion), and distribute the equity in the new unnamed company to shareholders.
Under the plan that will see longstanding chief executive officer Ronnie Leten go, Atlas Copco will hold the compressor and vacuum businesses, which has a revenue of about 74 billion kronor and that will focus on industrial customers.
"Both businesses are global leaders in their respective fields and will benefit from a more focused management responsibility," the group’s chairman Hans Straberg said in the statement.
The sudden move can be seen in the context of a wider trend in Europe where there are several spin-offs through initial public offerings (IPOs) already underway, as well as other major restructuring at companies including Volvo Group, Scania, Fiat Chrysler, Siemens and Atlas’ domestic rival Sandvik.
For now, the firm has nominated the current leader of Atlas Copco's Industrial Technique unit, Mats Rahmstrom, as chief executive effective April 1. Rahmstrom will replace Ronnie Leten (60) who is leaving the company after eight years at the helm of the group.
Investor, Atlas’ largest shareholder with almost a quarter of voting rights, backs the proposed split.
Shares in Atlas Copco were up 0.7% to 281.10 kronor as of 03:05 p.m. in Stockholm, giving the group a market capitalization of 335 billion kronor.