The Goldman Sachs Group, Inc. (GS) and the U.S. based private equity firm, Kohlberg Kravis Roberts & Co. L.P. (KKR) disclosed plans of divesting their 10.8% stake in Kion Group AG, as per a Reuters’ report on Tuesday. The Kion Group is a Germany-based leading forklifts manufacturer, trailing Toyota Motor Corp. (TM) in the market.
Another Reuters’ report confirmed that, later during the day, Goldman and Kohlberg Kravis executed the plan by offering their stakes at a price of nearly €315 million ($429 million) or €29.50 ($40.24) per share in the market.
Gains from the aforementioned deal raise chances of increasing shareholders’ return. In tandem with this, Kohlberg Kravis’ intraday share price movement reflected positive market response, with the stock closing at $25.66, up 1.1% from prior day.
However, Goldman’s stock price movement indicated negative investor sentiment. The stock closed at $178.29, declining almost 1% from the previous day. We believe the stake divesture is comparatively undersized when compared to the wide and diverse banking activities of Goldman.
Firms like Kohlberg Kravis and Goldman are always on the lookout for lucrative investment opportunities. Mergers, acquisitions as well as stake purchases are part of their inorganic growth strategy. Further, these financial organizations wait for the optimal time to divest assets to maximize gains.
In a recent regulatory filing, Kohlberg Kravis declared the purchase of 6.8% stake in Marvell Technology Group Ltd. (MRVL), a Bermuda-based semiconductor maker. Marvell Technology’s stable cash position, capital generating ability and debt free balance sheet made it an attractive pick for the investment manager.
Currently, both Goldman and Kohlberg Kravis carry a Zacks Rank #3 (Hold).