Kone shares are up 2% in Helsinki today, with Bloomberg saying that the Finnish elevator manufacturer is considering a possible (total or partial) acquisition of its peer TK Elevator, in discussions that are still at a preliminary stage.

This announcement of interest on the part of Kone seems entirely credible to us, Oddo BHF says, recalling that it had already begun discussions with ThyssenKrupp in 2019 before withdrawing from negotiations in February 2020.

According to the analyst, a merger between the world's No. 3 (Kone) and No. 4 (TKE) would give the new group a combined market share of more than 25% (in value), compared with nearly 16% for Otis (currently No. 1), but more than 35% in Europe and the United States.

However, Oddo BHF notes that such a merger is likely to encounter obstacles, namely possible reluctance on the part of competition authorities and a financing issue given TKE's valuation and Kone's cash position.