What Market Meltdown? Let's Do a $19 Billion Buyout

With impeccable timing, the private equity industry has agreed a jumbo leveraged buyout just as markets have turned dramatically. It’s a bad look, and Advent International and Cinven will have to strain every sinew to make their 17 billion-euro ($19 billion) deal for Thyssenkrupp AG’s elevator business pay off.

Germany’s Thyssenkrupp is a distressed seller but the industrial conglomerate ran the auction with finesse, using a high price from Finnish rival Kone Oyj to stimulate the bidding in the early stages. Kone benefited from more potential merger savings. It also faced antitrust hurdles. Hence the vendor put two buyout consortiums into the last round to battle it out. Regulatory clearance became irrelevant and the fight came down to money. Result? Advent and Cinven paid the price that Kone was mooting, without the attendant antitrust uncertainty.