Merger with Neles

Summary of the merger

The Boards of Directors of Valmet Oyj and Neles Corporation have on July 2, 2021, signed a combination agreement and a merger plan to combine the two companies through a merger.
The Extraordinary General Meetings of Valmet and Neles resolved to approve the merger on September 22, 2021.
The combined company will be a leading company with a unique offering for process industries globally with illustrative combined net sales for 2020 of approximately EUR 4.3 billion. In addition, it will have a globally balanced expert organization of 17,000 professionals.
The proposed combination will be implemented as a statutory absorption merger whereby Neles will be merged into Valmet. The name of the combined company will be Valmet Oyj.
Upon completion, Neles’ shareholders (excluding Valmet as well as Neles with respect to treasury shares held by Neles) will receive as merger consideration 0.3277 new shares in Valmet for each share they hold in Neles on the record date whereby, based on the current number of shares issued, Neles shareholders (excluding Valmet as well as Neles with respect to treasury shares held by Neles) would own approximately 18.8 percent of the shares and votes of the combined company, and Valmet shareholders would own approximately 81.2 percent of the shares and votes of the combined company.
The completion of the merger was expected to occur on January 1, 2022, subject to all conditions for completion being fulfilled. Due to the regulatory review processes taking longer than previously estimated, the completion of the merger is now targeted to occur on or before April 1, 2022.
On March 21, 2022 Valmet announced, that Valmet and Neles have received all competition approvals for the merger of Neles into Valmet - completion is expected to take place on April 1, 2022
On April 1, 2022, Valmet Oyj announced that the statutory merger of Neles Corporation into Valmet has been registered with the Finnish Trade Register on the effective date of the Merger on April 1, 2022. As a result of the registration of the completion of the Merger, Neles has been dissolved. Neles is consolidated to Valmet as of April 1, 2022.

Extraordinary General Meeting

Valmet Oyj's Extraordinary General Meeting (EGM) 2021 was held on September 22, 2021. The Extraordinary General Meeting resolved to approve the merger of Valmet Oyj and Neles Corporation and the resolutions relating to the merger proposed to the Extraordinary General Meeting. Read more from the EGM website here.

Links:

Documents related to the Merger

Swedish Prospectus Summary (Supplemented on March 3, 2022)

Minority Share in Neles (2020)

Sept 29, 2020 - Valmet proposed a statutory merger between Valmet and Neles to the Board of Directors of Neles

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. 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.

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.

Pasi Laine, President and CEO of Valmet, September 29, 2020

June 17, 2020 - Valmet acquired 14.9% ownership in Neles

On June 17, 2020 Valmet agreed to acquire 22,374,869 shares in the Neles Corporation from Solidium Oy, representing 14.88% of all Neles' shares and votes. The transaction between Valmet and Solidium took place on July 1, 2020. The agreed purchase price was EUR 8.00 per share, corresponding to a total transaction value of EUR 179 million at the signing, paid 100% in cash.

Neles Corporation was created in the partial demerger of Metso, in which Metso's Flow Control business became the independent Neles Corporation, listed on Nasdaq Helsinki. The completion of the partial demerger took place on June 30, 2020.

Neles is a good quality global company with a large share of recurring business and a strong position in the pulp and paper industry. It has demonstrated good growth and has potential to grow further.

Pasi Laine, President and CEO of Valmet, June 17, 2020

Neles in brief

Neles is a globally leading valve, valve automation and service company with strong exposure to the pulp and paper industry. Approximately 70% of Neles' net sales is recurring business. Neles' business is well diversified across process industries and regions, with 26% of net sales coming from the pulp and paper industry. Since 2011, Neles' orders received have grown by approximately 5% annually and the profitability has improved.

Source for financial figures: Neles CMD 2020