Atlas Copco to split in two and sell Dynapac

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Atlas Copco directional drill rig ‘NewCo’ will take over Atlas Copco’s mining and construction equipment production. Atlas Copco directional drill rig

Swedish equipment firm Atlas Copco has proposed splitting the group into two publically listed entities in 2018.

One company will retain the Atlas Copco name and will focus on industrial/manufacturing products such as compressors, gas treatment equipment, exhaust systems, vacuum lifts and portable generators.

The second entity has been given the working name of ‘NewCo’ and will focus on mining and construction products such as hydraulic drills, demolition tools, off-road loaders and trucks, pavers and compactors.

"We see that there are very few synergies between the businesses with a very limited overlap of customers," Atlas Copco board of directors chair Hans Straberg says.

"We have now grown the company in such a way that it makes sense to have these two businesses stand on their own." 

If the proposal is approved at Atlas Copco’s AGM in 2018, shares in NewCo will be distributed to current Atlas Copco shareholders, proportional to their current investment. The intention is to list NewCo on the Nasdaq Stockholm exchange in the second quarter of 2018.

"The board and management believe that long-term shareholder value will be created by splitting the group into two separate companies," Straberg says.

"Both businesses are global leaders in their respective fields and will benefit from a more focused management responsibility." 

News of the potential split comes hot on the heels of Atlas Copco’s announcement it would divest its Dynapac brand of road construction machines. Atlas Copco says this decision was made because the road construction division did not have the economies of scale to become No.1 or No.2 in its market segment.

Atlas Copco acquired the Dynapac brand in 2007. Since then it has manufactured asphalt rollers, planers and pavers under the Dynapac name. The Dynapac business includes sales and services operations in 37 countries and production facilities in five countries.

 

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