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.