02:45 AM EDT, 05/11/2026 (MT Newswires) -- Kone's (KNEBV.HE) planned 29.4 billion-euro acquisition of TK Elevator "looks expensive"but with benefits in the long run, RBC Capital Markets said May 8.

"Despite a lowish [return on invested capital], we do expect substantial EPS accretion. In the third year post-completion, our base case points to EPS accretion of 21%, with our bull case at 38% (and the bear case slightly dilutive). On leverage, we see leverage falling under each scenario thanks to growth in operating profit, with the net debt/EBITDA ratio falling below 3.0x after two years in our base case,"analysts wrote.

The research firm added that the combined entity is expected to be the "clear number 1 elevator and escalator player,"with sales of 20.5 billion euros, while the cost synergy target of 700 million euros appears "credible."The deal is also anticipated to significantly boost the Finnish elevator and escalator company's presence in the Americas, with the region's sales share to reach 35% from the previous 25%.

Still, RBC reiterated the stock's sector perform rating and price target of 57 euros, noting that the deal overhang makes a near-term re-rating "unlikely."