The Finnish Supervisory Authority has approved the merger prospectus concerning the combination of Valmet Oyj and Neles Corporation

The Finnish Supervisory Authority has approved the merger prospectus concerning the combination of Valmet Oyj and Neles Corporation

Valmet Oyj’s stock exchange release on September 2, 2021 at 12.00 p.m. EEST

NOT FOR PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, HONG KONG, SOUTH AFRICA, SINGAPORE, JAPAN, THE UNITED STATES OR ANY OTHER JURISDICTION WHERE SUCH PUBLICATION OR DISTRIBUTION WOULD VIOLATE APPLICABLE LAWS OR RULES OR WOULD REQUIRE ADDITIONAL DOCUMENTS TO BE COMPLETED OR REGISTERED OR REQUIRE ANY MEASURE TO BE UNDERTAKEN IN ADDITION TO THE REQUIREMENTS UNDER FINNISH LAW. SEE “IMPORTANT NOTICE” BELOW.

Valmet Oyj (“Valmet”) and Neles Corporation (“Neles”) announced on July 2, 2021 that the Boards of Directors of Valmet and Neles have agreed upon the combination of the two companies by signing a combination agreement and a merger plan (the “Merger Plan”), according to which Neles shall be merged into Valmet through a statutory absorption merger in accordance with the Finnish Companies Act whereby all assets and liabilities of Neles shall be transferred without a liquidation procedure to Valmet (the “Merger”). The shareholders of Neles shall receive new shares in Valmet in proportion to their shareholdings in Neles as merger consideration (the “Merger Consideration Shares”). On August 9, 2021, the Boards of Directors of Valmet and Neles have proposed that the Extraordinary General Meetings of Valmet and Neles, convened to be held on September 22, 2021, resolve upon the Merger as set forth in the Merger Plan.

The Finnish Financial Supervisory Authority has approved today, September 2, 2021, the Finnish language merger prospectus concerning the Merger (the “Merger Prospectus”) prepared for the issuance of the Merger Consideration Shares to Neles’ shareholders. An English language translation of the Merger Prospectus (the “English Merger Prospectus”) and a Swedish language translation of the summary of the Merger Prospectus will be notified to the financial supervisory authority in Sweden.

The Merger Prospectus, the English Merger Prospectus and the Swedish language translation of the summary of the Merger Prospectus will be available starting on or about September 2, 2021 on Valmet’s website at www.valmet.com/merger and on Neles’ website at www.neles.com/merger. Furthermore, the Merger Prospectus and the English Merger Prospectus will be available starting on or about September 7, 2021 at Valmet’s registered office at Keilasatama 5, FI-02150 Espoo, Finland and at Neles’ registered office at Vanha Porvoontie 229, FI-01380 Vantaa, Finland. In addition, the Merger Prospectus will be available starting on or about September 7, 2021 at the reception of Nasdaq Helsinki at Fabianinkatu 14, FI-00100 Helsinki, Finland.

The English Merger Prospectus contains the following previously unpublished information in relation to the Merger (any capitalized terms not defined in the following shall have the meanings assigned to them in the English Merger Prospectus):

Pro forma financial information

The English Merger Prospectus includes the unaudited pro forma combined financial information (the “Pro Forma Information”) presented for illustrative purposes only to give effect to the Merger of Valmet and Neles to Valmet’s financial information as if the Merger had been completed at an earlier date. The Pro Forma Information included in the English Merger Prospectus has been attached in full as Annex 1 to this stock exchange release.

The pro forma statements of income for the six months ended June 30, 2021 and for the year ended December 31, 2020 give effect to the Merger as if it had occurred on January 1, 2020. The pro forma statement of financial position as at June 30, 2021 gives effect to the Merger as if it had occurred on that date. The Pro Forma Information is unaudited.

The Pro Forma Information has been presented for illustrative purposes only. The hypothetical financial position and results included in the Pro Forma Information may differ from the Combined Company’s actual financial position and results. Further, the Pro Forma Information does not purport to project the financial position or results of the Combined Company as of any future date. In addition, the Pro Forma Information does not reflect any cost savings, synergy benefits or future integration costs that are expected to be generated or may be incurred as a result of the Merger. The Pro Forma Information has been compiled in accordance with the Annex 20 to the Commission Delegated Regulation (EU) 2019/980, and on a basis consistent with the accounting principles applied by Valmet in its consolidated financial statements prepared in accordance with IFRS.

The Merger will be accounted for as a business combination in accordance with the acquisition method of accounting under the provisions of IFRS with Valmet determined as the acquirer of Neles. As Valmet holds an equity interest in Neles prior to the Merger, the Merger is accounted for as a business combination achieved in stages. In the Merger, Valmet’s previously held equity interest in Neles will be remeasured to fair value at the Effective Date and a gain or loss will be recognized in the consolidated statement of income of Valmet at the Effective Date. The purchase consideration will include fair value of the Merger Consideration and fair value of Valmet’s previously held equity interest in Neles.

The Pro Forma Information reflects adjustments to the historical financial information to give pro forma effect to events that are directly attributable to the Merger and are factually supportable. The pro forma adjustments include certain assumptions related to the fair value of the purchase consideration, the fair valuation of the net assets acquired, accounting policy alignments, financing arrangements and other events related to the Merger, that the management believes are reasonable under the circumstances. Considering the ongoing regulatory approval processes which restrict Valmet’s access to detailed data of Neles and the fact that the final accounting measures of the Merger can only be done at the Effective Date, the pro forma adjustments presented are preliminary and based on information available at this time. The Pro Forma Information is subject to change, among others, due to the final fair value of the Merger consideration and Valmet’s previously held equity interest in Neles being determined based on the then-current fair value of Valmet’s share as at the Effective Date and the final purchase price allocation being based on the fair values of Neles’ assets acquired and liabilities assumed as at the Effective Date. Further, Valmet is able to conduct a detailed review of Neles’ accounting policies only after the Effective Date due to restrictions on information sharing before the Merger.

There can be no assurance that the assumptions used in the preparation of the Pro Forma Information or presenting Neles’ financial information in the Pro Forma Information in Valmet’s presentation format will prove to be correct. The actual results of the Merger may materially differ from the assumptions used and the pro forma adjustments reflected in the Pro Forma Information. Further, the accounting policies to be applied by the Combined Company in the future may differ from the accounting policies applied in the Pro Forma Information.

The following table sets forth a summary of key figures relating to Pro Forma Information as at the dates and for the periods indicated. The information is unaudited unless otherwise indicated.

	As at and for the six months ended June 30, 2021				For the year ended December 31, 2020
EUR million, unless otherwise indicated	Valmet historical	Neles reclas-sified	Merger	Combined Company pro forma	Valmet historical	Neles reclas-sified	Merger	Combined Company pro forma
Net sales.......................................................................................................................................................................	1,801	275	-7	2,069	3,740¹⁾	576	-15	4,301
Comparable EBITA......................................................................................................................................................	175	35	-0	210	365	85	-1	449
Operating profit............................................................................................................................................................	161	32	-17	176	319¹⁾	70	14	403
Profit for the period......................................................................................................................................................	121	22	-13	131	231¹⁾	48	45	324
Basic earnings per share, EUR.................................................................................................................................	0.81			0.71	1.54¹⁾			1.76
Total assets..................................................................................................................................................................	4,144	648	1,532	6,325
Total equity...................................................................................................................................................................	1,144	259	1,100	2,503
Net interest-bearing liabilities.....................................................................................................................................	-9	88	242	320

______________________ ¹⁾Audited.

VALMET OYJ
Board of Directors

For further information, please contact:

Pekka Rouhiainen, Director, Investor Relations, Valmet, tel. +358 10 672 0020

DISTRIBUTION:
Nasdaq Helsinki
Major media
www.valmet.com

Information on Valmet and Neles in brief

Valmet is a 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 2020 were approximately EUR 3.7 billion. Our 14,000 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.

Neles is one of the leading providers of mission-critical flow control solutions and services for process industries. With our global team of experts and innovative solutions, we help our customers to improve their process performance and ensure the safe flow of materials. Neles is listed on the Nasdaq Helsinki in Finland and had sales of about EUR 576 million in 2020. Neles employs about 2,850 people in approximately 40 countries.

Important notice

In a number of jurisdictions, in particular in Australia, Canada, Hong Kong, South Africa, Singapore, Japan and the United States, the distribution of this release may be subject to restrictions imposed by law (such as registration of the relevant offering documents, admission, qualification and other regulations). In particular, neither the Merger Consideration Shares nor any other securities referenced in this release have been registered or will be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) or the securities laws of any state of the United States and as such neither the Merger Consideration Shares nor any other security referenced in this release may be offered or sold in the United States except pursuant to an applicable exemption from registration under the Securities Act. There will be no public offering of securities in the United States.

This release is neither an offer to sell nor the solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in the United States or any other jurisdiction in which such offering, solicitation or sale would be unlawful. Save as required by applicable law or regulation, this release must not be forwarded, distributed or sent, directly or indirectly, in whole or in part, in or into the United States, or otherwise in or into any jurisdiction where the distribution of these materials would breach any applicable law or regulation, or would require any registration or licensing within such jurisdiction. Failure to comply with the foregoing limitation may result in a violation of the Securities Act or other applicable securities laws.

This release does not constitute a notice to an Extraordinary General Meeting (“EGM”) or a merger prospectus. Any decision with respect to the Merger of Neles into Valmet should be made solely on the basis of information contained in the actual notices to the EGM of Valmet and Neles, as applicable, and the Merger Prospectus or English Merger Prospectus as well as on an independent analysis of the information contained therein. You should consult the Merger Prospectus or English Merger Prospectus for more complete information about Valmet, Neles, their respective subsidiaries, their respective securities and the Merger.

This release contains forward-looking statements. All statements other than statements of historical fact included in this release are forward-looking statements. Forward-looking statements give the combined company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance, benefits of the Merger, and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “expect”, “aim”, “intend”, “may”, “plan”, “would”, “could”, and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the combined company’s control that could cause the combined company’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the combined company’s present and future business strategies and the environment in which it will operate in the future. Shareholders should not rely on these forward-looking statements. Neither Valmet nor Neles, nor any of their respective affiliates, advisors or representatives or any other person undertakes any obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release. Further, there can be no certainty that the Merger will be completed in the manner and timeframe described in this release and the Merger Prospectus, or at all.

ANNEX 1: Pro Forma Information

Attachments:

Annex 1 - Pro Forma Information