| Toshiba and KONE Corporation to Take Stake in One Another
20 December, 2001
Toshiba Elevator and Building Systems Corporation
Tokyo--Toshiba Elevator and Building Systems Corporation (TELC), a wholly-owned subsidiary of Toshiba Corporation, today announced that it has signed an Alliance Agreement with KONE Corporation of Finland that will reinforce the two companies' comprehensive relationship in the elevator and escalator business through the mutual acquisition of stocks.
By the beginning of March, 2002, TELC will increase its capitalization, and KONE will make an investment in the company's stock equivalent to 20% of the new capitalization. KONE will also receive the right to appoint two persons to TELC's board of directors. In the same time frame, TELC will acquire 5% of KONE's stock, and KONE's principal shareholders will propose the appointment of a TELC nominee to KONE's board of directors at the company's annual general meeting.
TELC and KONE started to collaborate in 1998. Today, they supply each other with parts and are engaged in joint procurement and co-development of elevators and escalators. The new agreement will promote further technical collaboration bringing together KONE's leading-edge system and mechanical technologies, including its machine-room-less elevator know-how, and TELC's capabilities in high-speed motors and inverters. The agreement is also expected to enhance competitiveness by shortening product development terms, promoting cost reductions and reinforcing the service organization, all essential for the two companies' continued business expansion.
The global market for elevators and escalators, including service and maintenance, is estimated at three trillion yen a year. KONE is a major presence in Europe, the American and Asian markets, while TELC has an established business base in the Japanese and Asian markets. In conjunction with this agreement, KONE and TELC will promote global business by establishing a global alliance committee. One mission of the committee will be to promote a stronger presence in Asia, including the Chinese market, where rapid growth is expected, by promoting collaboration in the two companies' manufacturing, sales, service and maintenance operations.
Under Toshiba's 01 Action Plan, the elevator and escalator business is viewed as having an integrator business model, open to strategic alliances with other leading companies. Toshiba expects closer collaboration with KONE, and the resulting synergies in technology and marketing capabilities, to support the accelerated globalization, expansion and reinforced competitiveness of its elevator and escalator business.
Outline of TELC
Outline of KONE CORPORATION
|Information in the press releases, including product prices and specifications, content of services and contact information, is current on the date of the press announcement,but is subject to change without prior notice.|