Metso Studies Separation of Pulp, Paper, Power Businesses into New Company

Metso, Finland, reports that it is considering the possible separation of its Pulp, Paper, and Power businesses into a new company. The company's current Mining and Construction and Automation businesses would remain in the current company after the potential separation. The contemplated transaction would help the two companies capitalize on their strengths in their respective markets faster and more efficiently, Metso notes.

Jukka Viinanen, Metso's chairman, said that the company has developed its businesses purposefully during the past years to the point where entering the next stage of development would be smoother as separate companies. "Both of them are strong global businesses with well-established positions in their customer industries. By separating the two, we would seek to accelerate strategy implementation, as clearer business structures would increase the focus and ambition of the two companies with distinct growth strategies. The board also believes that both companies would be seen as attractive investments, which has the potential to increase value for our shareholders."

Matti Kähkönen, president and CEO, added that "developing Mining, Construction, and Automation and Pulp, Paper, and Power businesses separately would help the already strong two entities to fully realize their potential. This would in turn benefit our customers and personnel through more focused management, superior competence development, and customer services, and through enabling both companies to cultivate their technology and services offering that would match their goals perfectly,"

The Metso Board aims to finalize the study process and announce further details about the possible separation by the end of the second quarter of 2013.

Although no decisions have been taken, the separation, if carried out, would likely be by means of a demerger (i.e. partial demerger as defined in the Finnish Companies Act), after which the Mining, Construction, and Automation businesses would remain with Metso, whereas Pulp, Paper, and Power businesses would constitute the new company, which would nitially have the same ownership structure as Metso and would be totally independent from it without any cross-ownership between Metso and the new company. This strategy study will be headed by Kähkönen.

If implemented, the demerger would leave Metso shareholders' ownership in the company unchanged. In addition, Metso shareholders would receive shares in the new company as demerger consideration in proportion to their shareholding in Metso. The demerger and listing of the new company's shares would be expected to take place before the end of this year.

TAPPI
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