Atlas Copco seeks to offload division

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The leading Swedish industrial company Atlas Copco is to offload a significant unit as it focuses more tightly on businesses where it is the market leader.

Atlas Copco is inviting bids for its road construction equipment business, having concluded that others will be better able to make the most of the unit. The division operates in 37 countries, and last year had revenues of SEK2,900m (US$325m).

The business manufactures rollers for asphalt and soil applications, planers and pavers, under the Dynapac trade name. It is part of Atlas Copco’s construction technique division, which also includes larger businesses in construction tools and portable compressors. The road construction business competes against Volvo, Caterpillar and Wirtgen among others.

Management has decided that the unit lacks the necessary economies of scale to compete efficiently and that there is no prospect of achieving market leadership or the number two position in its market. Accordingly Atlas Copco will take an SEK2bn write-off against the value of the unit and is inviting offers for it.

Atlas Copco continues to be active on the M&A front. Last autumn it bought Oerlikon’s vacuum business for US$505m and it has made around a dozen smaller deals in the last year. it also made a couple of disposals from its compressor division in 2015.

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