Metso's Board approves a demerger plan to divide Metso into two companies

Metso's Board approves a demerger plan to divide Metso into two companies 
HELSINKI, FINLAND -- (Marketwired) -- 05/31/13 --  
Metso Corporation's stock exchange release on May 31, 2013 at 10:00
a.m. local time 
* The Board has completed a strategy study, resulting in the
signing of a demerger plan 
* The new parent company for Metso's Pulp, Paper and Power
businesses will be   named Valmet Corporation 
* Financing arrangements for Valmet are in place; Metso has
received consents    and waivers from most of its lenders and will
immediately start a bondholder    consent process 
* Extraordinary General Meeting is planned to be held on or about
October 1, 2013 
The Board of Directors of Metso Corporation has completed a strategy
study and concluded that going forward a demerger would offer the best
potential for its Pulp, Paper and Power businesses as well as its
Mining and Construction and Automation businesses to utilize their
respective strengths in their customer industries faster and more
efficiently. Metso has developed its businesses actively during the
past decade through investing in the development of their global
service capabilities, broadening their technology offering through
substantial R&D and building their market positions through
acquisitions. Both new entities would be globally leading companies
in their respective markets and the next steps in their strategic
development would be taken most efficiently as two separate
companies, enabling more focused and crystallized strategies and
operations. The increased management and board focus should also help
the two independent companies in achieving stronger growth and
improved profitability. This would also be expected to result in
increased value for shareholders inasmuch as both companies would
have their own distinct characteristics and would offer different
investment profiles. 
Metso's Board has today approved a demerger plan to transfer all the
assets, debts and liabilities of Metso's Pulp, Paper and Power
businesses to a newly-formed company that will be named Valmet
Corporation. An application will be made to list the shares of Valmet
on the NASDAQ OMX Helsinki stock exchange. Following the demerger,
Metso's current Mining and Construction and Automation businesses
would remain in the current company, which would continue to operate
under the Metso name. Valmet would initially have the same ownership
structure as Metso and would be totally independent without any
cross-ownership between Metso and Valmet. 
The demerger will require the approval of an Extraordinary General
Meeting of Metso and the registration of the completion of the
demerger with the Finnish Trade Register following the creditor
hearing process pursuant to the Finnish Companies Act. If approved,
the planned registration date of the completion of the demerger is
December 31, 2013 and public trading in new Valmet shares on NASDAQ
OMX Helsinki is expected to commence as soon as possible thereafter. 
Jukka Viinanen, Metso's Chairman of the Board, says that the Board of
Directors recommends that shareholders approve the demerger. "After
carefully reviewing various alternatives that would accelerate the
implementation of Metso's strategy and its growth, the Board has
concluded that spinning off Metso's Pulp, Paper and Power businesses
through a demerger offers the best potential to increase the focus
and ambition of Valmet and Metso and the implementation of their
respective distinct growth strategies. The Board believes that this,
together with the creation of two attractive investment alternatives,
would also create strong potential to increase value for Metso's
shareholders." 
Matti Kahkonen, Metso's President and CEO, says: "As a long-standing
Metso employee, I am proud that our Pulp, Paper and Power businesses
have developed into a strong globally leading company over the past
decade and are now ready to take their next steps as an independent
company. The Valmet name reflects the long heritage of these
businesses and symbolizes their exceptional engineering achievements.
Based on preliminary feedback, I am convinced that both our customers
and our personnel - both in the Pulp, Paper and Power businesses and
in the Mining and Construction and Automation businesses - would
benefit from the independent governance and strategy that two
separate companies would offer. Both Valmet and Metso would be
sizeable, globally leading businesses with strong balance sheets.
Strengthening their respective cultures, goals and agility to execute
their strategy through a demerger would enable them to realize their
full potential in the future." 
In approving the demerger plan, the Board of Directors has sought to
ensure  the strong financial position for both Valmet and Metso.
Certain key financial figures for each company based upon the
attached illustrative consolidated pro-forma balance sheets and
income statements as of and for the year ended December 31, 2012
(with such assumptions and adjustments as are described therein) are
as follows: 
* Metso Corporation: Total assets of EUR 4,005 million, total
equity of EUR     1,362 million, gross debt of EUR 1,095 million, net
debt of EUR 388 million,   net sales of EUR 4,499 million, and EBITA
before non-recurring items of EUR   496 million 
* Valmet Corporation: Total assets of EUR 2,637 million, total
equity of EUR 
865 million, gross debt of EUR 195 million, net
debt of EUR -72 million, net     sales of EUR 3,005 million, and
EBITA before non-recurring items of EUR 192 
million 
Alongside its strategy study, Metso has taken steps to arrange
financing for both Metso and Valmet in preparation for the demerger.
This process has included obtaining consents and waivers from the
lenders under Metso's EUR 500 million revolving credit facility and
also from a majority of the lenders under its bilateral loan
arrangements, which consents and waivers, in the aggregate, cover
financial facilities totaling approximately EUR 2,700 million. In
order to facilitate the demerger process, Metso will today also
launch a consent solicitation process in respect of Metso's bonds
issued under the company's EMTN programme. The aggregate nominal 
amount of these bonds is approximately EUR 900 million and they
would, in accordance with the demerger plan, remain obligations of
Metso. Metso has also agreed on a new committed back-up facility of
EUR 500 million to support the consent solicitation process with the
bondholders. 
Metso has also arranged new funding for Valmet, including a EUR 200
million term loan, with a maturity of three years, and a EUR 200
million syndicated revolving credit facility, with a maturity of five
years from the demerger date. 
Metso has received a favorable pre-ruling from the Finnish tax
authorities confirming the tax-neutral treatment of the demerger in
Finland. 
Metso plans to hold an Extraordinary General Meeting on or about
October 1, 2013 to decide on the demerger and other Board proposals
based on the demerger plan. A separate notice related to the
Extraordinary General Meeting will be issued by the Metso Board at a
later time. Certain major Metso shareholders, including Solidium,
Cevian Capital, Varma Mutual Pension Insurance Company and Ilmarinen
Mutual Pension Insurance Company, have signed an undertaking to vote
in favor of the demerger at the Extraordinary General Meeting. The
demerger and listing prospectus, which is expected to be published in
September 2013, will contain more detailed information on the
demerger as well as on Valmet and Metso and their financial position. 
The Metso Board will propose to the Extraordinary General Meeting
that Valmet's Board of Directors would partly consist of certain
current members of the Metso Board, whose directorship in Metso would
end upon the registration of the completion of the demerger, and
partly of one or more new members to be elected by the Extraordinary
General Meeting. Similarly, the Metso Board will propose to the
Extraordinary General Meeting that the Metso Board would, after the
completion of the demerger, partly consist of those of its current
members who will not become members of the Valmet Board, and partly
of one or more new members to be elected by the Extraordinary General
Meeting. 
According to the attached demerger plan, the transaction would be
executed as a partial demerger, as defined in the Finnish Companies
Act. Upon registration of the completion of the demerger, Metso
shareholders would receive, as demerger consideration, one (1) share
in Valmet for each Metso share that they hold. No action would be
required from shareholders to receive this demerger consideration. 
SEB Corporate Finance is acting as the financial advisor for Metso
and as the Lead Manager and Arranger for the demerger, while White &
Case LLP is acting as Metso's legal counsel. 
Metso is a global supplier of technology and services to customers in
the process industries, including mining, construction, pulp and
paper, power, and oil and gas. Our 30,000 professionals based in over
50 countries contribute to sustainability and deliver profitability
to customers worldwide. Metso's shares are listed on the NASDAQ OMX
Helsinki Ltd. 
www.metso.com, www.twitter.com/metsogroup 
Metso will arrange a press conference in Finnish today, May 31, 2013,
at 1:00pm EET at the company's headquarters at Fabianinkatu 9A,
Helsinki, Finland. An international conference call for investors and
analysts will be held today, May 31, 2013, at 3:00pm EET / 1:00pm
London / 8:00am New York. The call-in numbers are as follows: +1 877
491 0064 for the US and +44 20 7162 0077 for other countries using
conference id 932934. An instant replay of the call will be available
until June 14, 2013, on +1 954 334 0342 (US) and +44 20 7031 4064
(other countries) with an access code
932934. 


 
Metso Corporation
 
Harri Nikunen
CFO
 
Juha Rouhiainen
VP, Investor Relations
 
Distribution:
NASDAQ OMX Helsinki Ltd
Media
www.metso.com

 
Attachments: 
* The Demerger Plan and its appendices, excluding
Appendices 2 and 4 (Metso's 
financial statements as of and for
the year ended December 31, 2012 and a 
description of Metso's
business mortgages, respectively) 
* The unaudited illustrative consolidated balance sheets of Valmet
Corporation 
and Metso Corporation as of December 31, 2012 and
March 31, 2013 and the 
unaudited illustrative consolidated income
statements of Valmet Corporation 
and Metso Corporation for the
year ended on December 31, 2012 and for the 
three months ended on
March 31, 2013 
Demerger plan: http://hugin.info/3017/R/1706159/564619.pdf 
Illustrative figures: http://hugin.info/3017/R/1706159/564620.pdf 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
that: 
(i) the releases contained herein are protected by copyright and    
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: Metso Corporation via Thomson Reuters ONE 
[HUG#1706159] 
For further information, please contact: 
Jukka Viinanen
Chairman of the Board
Metso Corporation
tel. +358 20 484 3000 
Matti Kahkonen
President and CEO
Metso Corporation
tel. +358 20 484 3000