Atlas Copco(ATCO-A.ST) Plans Split Into Two Companies In 2018

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Atlas Copco(ATCO-A.ST), the largest industrial corporation in Sweden by market value, today announced an intention to split into two listed companies, separating its industrial and mining operations. The Company intends to put the proposal to shareholders at its 2018 Annual General Meeting(AGM).

From this morning’s press release:

“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.”

“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.”

The split would be structured as a share distribution, with current Atlas Copco shareholders receiving stock in the mining NewCo in proportion to their existing holding. The new shares would be listed on Nasdaq Stockholm with completion expected in Q2 2018.

The Group has had mixed fortunes in recent years. Atlas’s industrial business has enjoyed steady growth while the mining operations, suffering from the slump in commodity prices, has seen higher volatility and falling margins.

It was also announced today that Atlas Copco’s current President and CEO Ronnie Leten will step down in April 2017. He is to be succeeded by Mats Rahmström, head of the company’s Industrial Technique division.

Disclosure: The author holds no position in Atlas Copco