Stockholm, Sweden-based Atlas Copco has initiated a process with the objective to sell its electric tool business — Milwaukee Electric Tool — a deal that could raise up to $700 million.

Göran Gezelius, senior executive vice president, Business Area Industrial Technique said, “Atlas Copco's electric tool business is stable and profitable, and it has significant market shares, particularly in North America. The business is, however, still far from the group's desired position of globally being number one or two in the markets we serve.”

The synergies between the electric tool business and other businesses within the Atlas Copco Group are limited in distribution, manufacturing and product development. Also, the selling process is different. While the electric tool divisions sell to industrial distributors and retailers, most other divisions sell directly to industrial end-users and only to a certain extent through distributors.

Atlas Copco's electric tool business consists of two divisions within the Industrial Technique business area: AEG Electric Tools acquired in 1991 and Milwaukee Electric Tool acquired in 1995 for $550 million. Sales are chiefly done under the Milwaukee brand, and two thirds of sales are done in North America. Besides the electric tool business, the business area has two industrial tool divisions.

Merrill Lynch International is advising Atlas Copco in this matter.