Valmet has proposed a statutory merger between Valmet and Neles to the Board of Directors of Neles

Valmet Oyj’s stock exchange release (inside information) on September 29, 2020 at 9:30 a.m. EET

Valmet announced 14.88 percent share acquisition of Neles’ shares from Solidium Oy on June 17, 2020 and has gradually increased its ownership further to 29.5%.  

Valmet sees that a combination of the two companies in the long-term would create excellent value for Valmet’s and Neles’ shareholders. Valmet has today approached the Board of Directors of Neles with a proposal to start discussions on a potential statutory merger between the two companies.

The merger proposal is based on a strong underlying industrial logic and long-term shareholder value perspective. Both Valmet and Neles are leaders in their respective fields, the companies share a common heritage, serve to a large extent similar global customer industries and benefit from the same global megatrends. Valmet and Neles together would create a Nordic based globally leading company with a unique offering to process industries and a globally balanced expert organization of over 16,000 professionals around the world.

The combination would create excellent long-term value to the shareholders of both companies. It would form a strong platform for further business growth especially in automation systems and valves. Furthermore, the combination would be an exciting opportunity for Neles’ and Valmet’s employees, as well as customers of both companies who would benefit from the strength of the combined entity and offering.  More specifically, the merger would create a global leader with:

• over 16,000 employees and over EUR 4 billion in net sales
• leading market positions in its respective segments
• a large share of recurring, stable business with good profitability consisting of services, automation systems and valves
• a strong confidence and reputation among its customers
• a globally balanced expert organization with a deep understanding of process industry customers and shared performance orientation
• unique capabilities for joint technology development and for leading industrial internet based remote services offering
• excellent potential to optimize its balance sheet
• synergy potential including but not limited to:
  • Revenue synergies from improved package sales, cross-selling to energy and process industry customers, and a more comprehensive service offering and an extended service network
  • Technology development synergies driven by improved potential for process automation technology development and a larger remote monitoring and predictive maintenance offering
  • Cost synergies from global and regional functions, common locations, listed company costs and more efficient supply chain and procurement

A statutory merger between the companies require negotiations between the two companies. Even if such negotiations are initiated, there is no certainty that they will result in a final agreement.

Comment from Pasi Laine, President and CEO of Valmet

“Valmet and Neles share to a large extent similar customer base, have a common heritage and are supported by the long-term megatrends. We see that it would be highly beneficial for both Valmet’s and Neles’ shareholders if the two companies were combined. That would create a globally leading company with good potential for profitable growth and excellent shareholder value.

We have successfully taken Valmet forward since 2013.  Today, Valmet is a strong, continuously developing company with a solid track record in creating value to its shareholders, customers and employees. Over the past years, we have made well considered and successfully integrated acquisitions with strong strategic fit with Valmet. We see that the strategic fit between Valmet and Neles would also be excellent. The continued success of our Automation business after integration into Valmet in 2015 shows that Valmet is skilled in sustaining the key competitive advantages of the businesses combined and in nurturing them into further success.”

Invitation to conference call for analysts, investors and media

Valmet will arrange a conference call in English for analysts, investors, and media on Tuesday, September 29, 2020 at 12:30 p.m. Finnish time (EET).

Conference call participants are requested to dial in at least five minutes prior to the start of the conference, at . The participants will be asked to provide the following conference PIN: 23483623#.

The conference call can be followed through a live audiocast at

/2020-0929-audiocast.

Further information, please contact:

Pasi Laine, President and CEO, Valmet, tel. 1

Kari Saarinen, CFO, Valmet, tel. 0

Anu Salonsaari-Posti, Senior Vice President, Marketing and Communications, Valmet, tel. 3

Pekka Rouhiainen, Director, Investor Relations, Valmet, tel. 0

VALMET

Kari Saarinen

CFO

Pekka Rouhiainen

Director, Investor Relations

Valmet is the leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. We aim to become the global champion in serving our customers.

Valmet’s strong technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production. Our advanced services and automation solutions improve the reliability and performance of our customers’ processes and enhance the effective utilization of raw materials and energy.

Valmet’s net sales in 2019 were approximately EUR 3.5 billion. Our more than 13,000 professionals around the world work close to our customers and are committed to moving our customers’ performance forward – every day. Valmet’s head office is in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.

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