Metso Minerals and Outotec have agreed to merge to create “Metso Outotec” a company that will deliver process technology and equipment to the minerals, metals and aggregates industries.
The new combined company, which excludes Metso Flow Control, has a combined sales total of €3.9 billion in 2018, or €4.2 billion including the recently announced acquisition of McCloskey by Metso.
“Today is an exciting day as we announce the transformational combination of two great companies and simultaneously create an independent leader in flow control. The combination of Metso and Outotec is a unique opportunity to deliver significant value for our shareholders with a broad presence across minerals, metals and aggregates value chains and an even stronger platform for growth and innovation,” said Metso Chairman Mikael Lilius.
“Metso Outotec brings together a long history of technological leadership, customer focus and excellence in project execution. Metso Outotec will be further supported by the realization of the significant synergies potential in the combination. We look forward to working together with Outotec and its employees to develop an industry leader with attractive opportunities.”
Creating Metso Outotec
The combination of Metso Minerals and Outotec is expected to create a unique company in the industry. Metso Outotec will leverage the strengths of both companies, including technology and research and development, product and process excellence, scale and global service offering footprint.
“This is an industry-shaping combination that joins two uniquely complementary companies. It builds on Outotec’s leading technology competencies and Metso’s excellent service capabilities,” said Outotec Chairman Matti Alahuhta. “Metso Outotec’s global operating network, scale, wide technology and service offerings and sustainable development principles will unlock significant benefits for all stakeholders. … I am convinced that Metso Outotec will provide interesting opportunities to its employees, customers and partners.”
Metso Flow Control becomes Neles
Metso Flow Control will become a separately listed independent flow control equipment and services company under the name of Neles.
As Neles, Metso will continue as a separately listed entity focused on flow control, independent from Metso Outotec and 100 per cent owned by Metso shareholders at completion.
The current legal entity Metso will be renamed Neles, and its headquarters will be in Vantaa, Finland, and its listing on Nasdaq Helsinki will continue. Olli Isotalo will become CEO of Neles and will join Metso’s management team as of July 15.
“I firmly believe that timing is now right to establish a focused standalone flow control company. Neles offers an exceptional product portfolio and service offering with best-in-class profitability,” Lilius said. “I am confident that a focused flow control company with an attractive product offering, proven track-record of strong performance and compelling growth prospects will unlock further value for Metso’s current shareholders and new investors alike.”
The combination of the two companies will be implemented through a partial demerger of Metso, in which all assets and liabilities of Metso that relate to Metso Minerals will transfer to Outotec in exchange for newly-issued shares in Outotec to be delivered to Metso shareholders. Outotec shareholders will continue to own their shares in Outotec.
Upon completion, Metso shareholders will receive 4.3 newly-issued shares in Outotec for each share owned in Metso on the record date. This implies Metso shareholders would own about 78 per cent of the shares and votes of Metso Outotec, and Outotec shareholders would own approximately 22 per cent of the shares and votes of Metso Outotec.
In addition, Metso shareholders will retain their current shares in Metso, which will be renamed Neles
The board of the new entity will include board members from both companies. It is proposed that Metso Outotec’s Chairman will be Mikael Lilius and that the Vice Chairman will be Matti Alahuhta.
“Metso Outotec will have capabilities that will enable us to drive sustainable growth, while providing our customers with high-quality technology, equipment and services that will ultimately improve their businesses,” said Metso CEO Pekka Vauramo.
The next steps
The new company’s headquarters will be in Helsinki, Finland and it will maintain its listing on Nasdaq Helsinki
Completion of the merger is expected in the second quarter of 2020, subject to the approval of the transaction by the EGMs of both Metso and Outotec, the statutory creditor hearing process and receipt of all required regulatory and other approvals.
“The combination of Outotec and Metso marks an important milestone in each company’s history and in Outotec’s strategic development,” said Outotec CEO Markku Teräsvasara. “I look forward to building a great new company together with the Outotec and Metso Minerals employees, as part of Metso Outotec.”