Swedish equipment manufacturer Atlas Copco plans to split into two companies next year, with its mining and construction tools division shaping as the basis of a new entity.
NewCo, the working name for the spin-off company, will focus on mining and civil engineering customers and include the mining and rock excavation technique business area and the constriction tools division, according to Atlas Copco.
The business has about 12,000 employees and annual revenues of 28 billion krona ($4.2 billion). Atlas Copco will propose the split at its 2018 annual general meeting.
If a split does occur, the remaining Atlas Copco business would focus on industrial customers and include the compressor technique, vacuum technique and industrial technique business area, plus the portable energy division and speciality rental division.
Atlas Copco president and chief executive officer Ronnie Leten said the two businesses have different demand drivers and demand characteristics.
“A split will increase their respective abilities to add value to customers, grow the business and attract talent,” Leten said.
If approved by shareholders, the split would take place through a share distribution, whereby Atlas Copco shareholders receive shares in NewCo in proportion to their existing stake.
Meanwhile, Atlas Copco has appointed Mats Rahmström as its new president and CEO, effective April 27. Rahmström will replace Leten, who has resigned after eight years in the position.