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

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

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 Kähkönen, 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

For further information, please contact:

Jukka Viinanen, Chairman of the Board, Metso Corporation, tel. +358 20 484
3000
Matti Kähkönen, President and CEO, Metso Corporation, tel. +358 20 484 3000

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
Illustrative figures

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Source: Metso Corporation via Thomson Reuters ONE
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