A consortium involving Abu Dhabi Investment Authority is said to be among the bidders
3G Capital, the private equity firm that’s made a name for itself buying food giants from Kraft to Burger King, is eyeing a new frontier: elevators.
The Brazilian-American investment firm is among suitors that submitted bids for Thyssenkrupp AG’s elevator unit by last week’s deadline, according to people familiar with the matter. The business could fetch more than 15 billion euros ($17 billion), the people said, asking not to be identified because the information is private.
3G’s interest comes as a surprise, as it’s known more for buying consumer brands like the Popeyes fast-food chain and the maker of Heinz ketchup than it is for acquiring industrial companies. The firm, which often teams up with Warren Buffett’s Berkshire Hathaway Inc. on deals, has earned a reputation for aggressively slashing costs.
That formula has fallen flat lately for 3G, which was co-founded by Swiss-Brazilian billionaire Jorge Paulo Lemann. Shares of Kraft Heinz Co. have lost more than a third of their value over the past 12 months, battered by a regulatory investigation, weak results and a writedown on the value of some of its brands.
3G is competing for the Thyssenkrupp business against a number of other private equity firms and strategic bidders, a list that’s expected to be whittled down in the next few weeks, the people said.
Finnish elevator maker Kone Oyj partnered with CVC Capital Partners to make a joint offer, while Blackstone Group Inc. submitted a bid with Carlyle Group LP and Canada Pension Plan Investment Board, the people said. Brookfield Asset Management Inc. and a separate consortium of Advent International, Cinven and the Abu Dhabi Investment Authority lodged their own bids, said the people. Japan’s Hitachi Ltd. has also been considering an offer, Bloomberg News reported earlier.
Representatives for Thyssenkrupp, 3G, ADIA, Advent, Blackstone, Brookfield, Carlyle, Cinven, CPPIB, CVC and Kone also declined to comment. Hitachi couldn’t be immediately reached for comment outside regular business hours.
Thyssenkrupp is exploring a sale of elevators, its most valuable asset, to generate much-needed cash and fund a turnaround of the steel-to-automotive conglomerate. It’s still debating whether to sell a majority or minority stake in its crown jewel, the people said. It’s also been making separate preparations for a potential initial public offering.
The beleaguered German company wants to avoid a long antitrust review and a repeat from earlier this year when European regulators derailed a planned steel venture with Tata Steel Ltd. Buyout firms would avoid competition hurdles, but Finnish rival Kone would potentially be able to make a higher offer and generate more cost savings, people familiar with the matter have said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.