January 15, 2015
Finland’s Valmet, a maker of pulp and paper production machines, is buying a process automation systems business from engineering group Metso for EUR 340 million (USD 397 million). Valmet shares jumped 6.7 percent to EUR 10.78 by 1330 GMT, with some analysts saying it had got a good price.
“Some were expecting the business to fetch a better price, but because it’s so specialized in paper and pulp there likely wasn’t much interest in it,” Pohjola analyst Pekka Spolander said. The deal will broaden Valmet’s product portfolio, and modestly lift average margins at Metso, analysts said.
Metso said it expected to book a significant capital gain on closing of the deal. Its shares were up 0.6 percent to EUR 23.64. Analysts were not surprised by the deal, as Metso had been mulling the sale of the division after reviewing its strategy last year.
The business, with annual sales of about EUR 300 million, will serve Valmet’s industrial markets, and analysts said it could have been moved to Valmet sooner, when the company was spun off from Metso at the beginning of 2014.
Metso, which had sales of about EUR 3.8 billion in 2013, makes grinding mills and crushers for miners, and valves and pumps for the oil and gas industry. Valmet, a rival to Austria-based Andritz and Germany’s Voith, made EUR 2.6 billion of sales in its last reported financial year.
The Finnish state owns more than 11 percent in both firms.
