The combination is expected to generate annual run-rate synergies of approximately EUR 25 million of which approximately 60 percent are expected to be achieved by 2023 and approximately 90 percent by 2024.
July 2, 2021
Valmet and Neles Corporation have announced that their respective Boards of Directors have signed a combination agreement (the “Combination Agreement”) and a merger plan to combine the two companies through a merger (the “Combined Company”).
Some major transaction highlights:
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 approximately 17,000 professionals.
The Combined Company expects to have growth potential in all current businesses and in new emerging sectors supported by favorable megatrends. It will also have enhanced growth opportunities across automation and flow control serving a range of various process industries with a strong sustainability focus. The Combined Company will benefit from broader revenue and cost synergies anchored in the strong industrial logic of combining flow control and automation systems.
The combination is expected to generate annual run-rate synergies of approximately EUR 25 million of which approximately 60 percent are expected to be achieved by 2023 and approximately 90 percent by 2024. Total one-off implementation costs related to synergies are expected to be approximately EUR 25 million.
The proposed combination will be implemented as a statutory absorption merger whereby Neles will be merged into Valmet.
The combination is subject to, among other items, approval by a majority of two-thirds of the votes cast and shares represented at the respective Extraordinary General Meetings (“EGM”) of Valmet and Neles, and the obtaining of merger control and other regulatory approvals.
The completion is expected to occur on or about January 1, 2022, subject to all conditions for completion being fulfilled.
It is proposed that the Board of Directors of the Combined Company will include six (6) directors from the current Board of Directors of Valmet (Mikael Mäkinen, Aaro Cantell, Pekka Kemppainen, Per Lindberg, Monika Maurer and Eriikka Söderström) and two (2) directors from the current Board of Directors of Neles (Jaakko Eskola and Anu Hämäläinen). It is proposed that the Combined Company’s Chairman of the Board of Directors will be Mikael Mäkinen and that the Combined Company’s Vice Chairman of the Board of Directors will be Jaakko Eskola.
Mr. Pasi Laine will continue to act as the President and CEO of the Combined Company after the completion of the merger.
Valmet Chairman, Mr. Mikael Mäkinen, said: “The combination of Valmet and Neles will create a broad and competitive product offering for our customers and build on the excellent reputation of both of our businesses. The transaction creates a global industrial leader with a bright future beyond what we could achieve separately. Together our businesses are better positioned to drive innovation and leadership in sustainability.”
Neles Chairman, Mr. Jaakko Eskola, said: “The common heritage of Valmet and Neles will allow for a smooth integration of our two companies to the benefit of shareholders, customers and employees. Neles will benefit from enhanced scale to accelerate its growth and building on the excellent work done by Neles management since the formation of Neles as an independent company in 2020.”
Valmet President and CEO, Mr. Pasi Laine, said: “We are delighted with the announcement of the merger which will create an even stronger Valmet with a strong offering to global process industries and a global team of 17,000 professionals around the world. The Combined Company will have solid business fundamentals, a strong financial profile, attractive growth potential and estimated synergies contributing to the enhanced shareholder value.”
Neles President and CEO, Mr. Olli Isotalo, said: “Through our capabilities and know-how, we have positioned Neles for best in class growth and profitability and now look forward to accelerating this agenda as part of the Combined Company. We are delighted about the opportunities to continue to execute our growth in flow control across process industries from an even stronger base. The combination also creates attractive opportunities to digitalize our joint services to support customers’ efforts to achieve greater sustainability in their operations.”