UPDATE 1-Schindler merges subsidiary, shares rise

* Subsidiary ALSO to be merged with Droege’s Actebis

* Schindler to benefit from focus on core business

* ALSO-Actebis seen with better market position

* Shares in Schindler rise 4.6 pct, ALSO gains 23 pct

(Adds details, shares, analyst comment, press conference)

ZURICH, Aug 13 (BestGrowthStock) – Schindler (SCHP.S: ) said on Friday
it was merging its ALSO subsidiary with a competitor, in a move
to focus on its core lift and elevator business and to turn the
dilutive ALSO stake into a promising financial investment.

Publicly listed ALSO (ALSN.S: ), in which Schindler holds a 64
percent stake, will merge its activities with German Droege
International’s Actebis unit to create Europe’s third-largest
information technology and consumer electronics distribution
company with a turnover of around 10 billion Swiss francs ($9.53
billion).

“Schindler shares were trading at a discount of around 10
percent as ALSO as a non-core business was diluting the result,”
Vontobel analyst Serge Rotzer said. “Schindler will now be
valued as a pure elevator and escalator player.”

Shares in Schindler rose 4.6 percent to 95.40 francs at 1012
GMT while ALSO gained 23.3 percent to 57.90 francs.

Unlisted German Droege, which acquired Actebis in 2009, will
become the majority shareholder and Schindler will continue to
hold a stake of around 33 percent, which will be considered as
an independent financial investment.

The combined entity will have better purchasing power
through cost leadership, ALSO Chief Executive Thomas Weissmann
told a media conference.

For Rotzer at Vontobel, the ALSO-Actebis entity will benefit
from synergies. “Margins should improve and this investment
should offer a higher return (to Schindler)”, he said.

Oskar Schenker, an analyst at Swiss broker Sarasin, also
welcomes the news. “Schindler will decrease its involvement and
it is likely that sooner or later some or all of the ALSO shares
will be placed,” he said.

The new firm, which will remain listed on the Swiss stock
exchange under the name ALSO with headquarters in the Swiss town
of Hergiswil, will offer logistics and distribution services for
information and communication technology and consumer
electronics in Europe.

The completion of the merger is subject to the approval of
competition authorities and an ALSO extraordinary shareholder
meeting and the finalization of mutual due diligence, the
companies said.
($1=1.049 Swiss Franc)
(Reporting by Silke Koltrowitz; Editing by Jon Loades-Carter)

UPDATE 1-Schindler merges subsidiary, shares rise