Metso aims to improve strategic focus and accelerate growth; the Board has undertaken a strategy study relating to a possible demerger

The Board of Directors of Metso Corporation has decided to commence a process to study the potential separation of the company’s Pulp, Paper and Power businesses into a new company, which would be listed on the NASDAQ OMX Helsinki stock exchange. Metso’s current Mining and Construction and Automation businesses would remain in the current company after the possible separation. The contemplated transaction would be designed to help the two companies to capitalize on their strengths in their respective markets faster and more efficiently.

Jukka Viinanen, Metso’s Chairman of the Board, says that Metso has developed its businesses purposefully during the past years to the point where entering the next stage of development would be smoother as separate companies. “Both of them are strong global businesses with well-established positions in their customer industries. By separating the two, we would seek to accelerate strategy implementation, as clearer business structures would increase the focus and ambition of the two companies with distinct growth strategies. The Board also believes that both companies would be seen as attractive investments, which has the potential to increase value for our shareholders.”

”Developing Mining, Construction and Automation and Pulp, Paper and Power businesses separately would help the already strong two entities to fully realize their potential. This would in turn benefit our customers and personnel through more focused management, superior competence development and customer services, and through enabling both companies to cultivate their technology and services offering that would match their goals perfectly,” says Matti Kähkönen, Metso’s President and CEO.

The study relating to the possible separation will concentrate on a range of issues, including certain matters pertaining to taxation and financing. Metso will also discuss the potential demerger with its customers, suppliers, rating agencies, creditors, employees and other relevant third parties. The Metso Board aims to finalize the study process and announce further details about the possible separation by the end of the second quarter of 2013.

Although no decisions have been taken, the separation, if carried out, would likely be by means of a demerger (i.e. partial demerger as defined in the Finnish Companies Act), after which the Mining, Construction and Automation businesses would remain with Metso, whereas Pulp, Paper and Power businesses would constitute the new company, which would be listed on the NASDAQ OMX Helsinki stock exchange. The new company would initially have the same ownership structure as Metso and would be totally independent from it without any cross-ownership between Metso and the new company. This strategy study will be headed by Metso’s President and CEO Matti Kähkönen.

If implemented, the demerger would leave Metso shareholders’ ownership in the company unchanged. In addition, Metso shareholders would receive shares in the new company as demerger consideration in proportion to their shareholding in Metso.

If Metso decides to pursue the demerger, the Board of Metso would expect to approve and register a demerger plan by the end of the second quarter of 2013.Metso’s Extraordinary General Meeting would be expected to make its final decision on the potential demerger during the second half of 2013. The demerger and listing of the new company’s shares would be expected to take place before the end of 2013.

Significant shareholders of Metso (Solidium, Cevian Capital, Varma Mutual Pension Insurance Company and Ilmarinen Mutual Pension Insurance Company) have expressed their support to the Board’s decision to commence a strategy study relating to the possible demerger.