BEIJING - Kone Oyj, a leading global elevator and escalator maker, has acquired the controlling interest in its Chinese joint venture, the company said on Tuesday.

Finland-based Kone paid 950 million yuan ($150.86 million) for a further 40 percent stake in GiantKone Elevator Co Ltd, which was established with Zhejiang Giant Holding Co Ltd in 2005, and increased Kone's ownership to 80 percent.

The transaction was completed in December, but it still requires final approval by the Chinese authorities.

"GiantKone will continue doing business as a separate entity utilizing the GiantKone brand," said Matti Alahuhta, president of Kone Corp.

GiantKone, based in Huzhou of East China's Zhejiang province, employs more than 2,000 people. Its revenue was more than 1.5 billion yuan in 2011.

Giant Holding still has a 20 percent stake in GiantKone, which Kone won't purchase, Alahuhta said.

"The current 80-20 partnership is the best solution for both of us," he said.

The acquisition has given Kone a leading position in the elevator industry in China, since the combined market share of Kone and GiantKone was about 14 percent in 2010.

The acquisition will also let Kone extend its reach to medium-sized cities in the central and western parts of China, which offer the fastest-growing markets, Alahuhta said. GiantKone is also pleased with the transaction.

"The remaining 20 percent stake could be of more interest to Giant Holding than the original situation, since the entire company will have better business," said Qian Jiang, chairman of GiantKone.

Qian said the reorganized GiantKone would get more support from Kone, including technology, international experience and staff management.

China is the world's largest elevator market. The total number of elevators and escalators in service in the country was about 2 million at the end of 2011, according to the China Elevator Association.

However, the industry was affected by accidents in 2011.

An escalator accident at a subway station in Beijing, which killed a 13-year-old boy on July 5, drew public attention to elevator safety and led to inspections of elevators all over the country.

The General Administration of Quality Supervision, Inspection and Quarantine said that it had examined 231,306 elevators through the end of July 2011, and 11,896 had previously undetected problems.

In the past eight months, some defective elevators were removed from service and some building projects re-opened bidding for elevators.

Also, the safety rules for escalators were updated and revised last July.

On the whole, heightened public attention has been good for the industry's development, business insiders said.

China Daily