Atlas Copco to Explore Selling Rental Business

Posted on February 3, 2006

Following what it said was “a thorough strategic review,” Atlas Copco has decided to explore a divestment of its construction equipment rental operations, i.e. the U.S.-based Rental Service Business Area.

"The Rental Service business is growing and performing extremely well," said Gunnar Brock, president and CEO, Atlas Copco Group. "The operating environment and the business characteristics, however, are very different from Atlas Copco's industrial equipment operations and the possibilities to capture and develop synergies are limited."

The Atlas Copco said its strategy is to be and remain a global leader in its businesses, yet the Atlas Copco Rental Service operation is only active in North America. "To grow Rental Service aggressively - in North America and even more so internationally - would accentuate the operational differences and lack of synergies vis-a-vis the rest of the group. This would also change the Atlas Copco Group's business and capital profile in an unwanted direction," said Brock.

The divestment process will start immediately, with the aim of generating the highest possible value for the Atlas Copco shareholders. Deutsche Bank has been retained to advise and assist in this process.