Demerger Plan to Divide Metso into Two Companies
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Metso, Finland, this past week approved a demerger plan to transfer all of the assets, debts, and liabilities of its Pulp, Paper, and Power businesses to a newly-formed company that will be named Valmet Corp. An application will be made to list the shares of Valmet on the NASDAQ OMX Helsinki stock exchange. In relaed action, the company also appointed Pasi Laine president and CEO of the new company (see article in the People section below).
Following the demerger, Metso's current Mining and Construction and Automation businesses would remain in the current company, which would continue to operate under the Metso name. Valmet would initially have the same ownership structure as Metso and would be totally independent without any cross-ownership between Metso and Valmet.
The demerger will require the approval of an extraordinary general meeting of Metso and the registration of the completion of the demerger with the Finnish Trade Register following the creditor hearing process pursuant to the Finnish Companies Act. If approved, the planned registration date of the completion of the demerger is December 31, and public trading in new Valmet shares on NASDAQ OMX Helsinki is expected to commence as soon as possible thereafter.
Jukka Viinanen, Metso's chairman of the board, says that the company's board recommends that shareholders approve the demerger. "After carefully reviewing various alternatives that would accelerate the implementation of Metso's strategy and its growth, the board has concluded that spinning off Metso's Pulp, Paper and Power businesses through a demerger offers the best potential to increase the focus and ambition of Valmet and Metso and the implementation of their respective distinct growth strategies. The board believes that this, together with the creation of two attractive investment alternatives, would also create strong potential to increase value for Metso's shareholders."
Matti Kähkönen, Metso's president and CEO, adds that "as a long-standing Metso employee, I am proud that our Pulp, Paper and Power businesses have developed into a strong globally leading company over the past decade and are now ready to take their next steps as an independent company. The Valmet name reflects the long heritage of these businesses and symbolizes their exceptional engineering achievements. Based on preliminary feedback, I am convinced that both our customers and our personnel—in the Pulp, Paper and Power businesses and in the Mining and Construction and Automation businesses—would benefit from the independent governance and strategy that two separate companies would offer. Both Valmet and Metso would be sizeable, globally leading businesses with strong balance sheets. Strengthening their respective cultures, goals, and agility to execute their strategy through a demerger would enable them to realize their full potential in the future."
Metso plans to hold an extraordinary general meeting on or about October 1 to decide on the demerger and other board proposals based on the demerger plan.
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