Metso and Outotec have agreed to combine Metso Minerals and Outotec to create a leading company in process technology, equipment, and services, serving the minerals, metals, and aggregates industries. The combined company, comprising Metso Minerals and Outotec but excluding Metso Flow Control, will be named Metso Outotec. It had illustrative combined sales of €3.9 billion in 2018 (approximately €4.2 billion including the impact of the recently announced acquisition of McCloskey by Metso).
Metso Flow Control will be a pure-play listed entity under the name of Neles, with 2018 sales of €593 million.
The combination of Metso Minerals and Outotec is complementary and is expected to create a unique company in the industry. It will leverage the strengths of both companies, including technology and R&D, product and process excellence, scale, and global service offering footprint. It is expected that the combination will deliver benefits to all stakeholders.
Metso Minerals and Outotec expect to achieve run-rate annual pre-tax cost synergies of at least €100 million, and run-rate annual revenue synergies of at least €150 million, delivering significant value for shareholders. The recently announced acquisition of McCloskey is expected to complement the business profile of Metso Outotec, expanding and strengthening the aggregates business.
The combination will be implemented through a partial demerger of Metso, in which all assets and liabilities of Metso that relate to Metso Minerals will transfer to Outotec in exchange for newly-issued shares in Outotec to be delivered to Metso shareholders. Outotec shareholders will continue to own their shares in Outotec. Upon completion, Metso shareholders will receive 4.3 newly-issued shares in Outotec for each share owned in Metso on the record date. This implies Metso would own approximately 78% of the shares and votes of Metso Outotec, and Outotec shareholders would own approximately 22% of the shares and votes of Metso Outotec.
The current CEO of Metso, Pekka Vauramo, will become Metso Outotec’s CEO, and the current CEO of Outotec, Markku Teräsvasara, will become the Deputy CEO of Metso Outotec. Eeva Sipilä will become Chief Financial Officer and Deputy CEO of Metso Outotec. Metso Outotec’s headquarters will be in Helsinki in Finland, and it will maintain its listing on Nasdaq Helsinki.
Metso Outotec will apply and seek to develop the sustainability agendas of Metso and Outotec across the enlarged group.
Completion is expected in 2Q20, subject to the approval of the transaction by the EGMs of both Metso and Outotec, the statutory hearing process, and receipt of all required regulatory and other approvals.
“Today is an exciting day, as we announce the transformational combination of two great companies and simultaneously create and independent leader in flow control,” said Mikael Lilius, Metso Chairman. “The combination of Metso and Outotec is a unique opportunity to deliver significant value for our shareholders with a broad presence across minerals, metals, and aggregates value chains, and an even stronger platform for growth and innovation. Metso Outotec brings together a long history of technological leadership, customer focus, and excellence in project execution. Metso Outotec will be further supported by the realisation of the significant synergies potential in the combination. We look forward to working together with Outotec and its employees to develop an industry leader with attractive opportunities.
“I firmly believe the timing is now right to establish a focused standalone flow control company,” Lilius continued. “Neles offers a product portfolio and service offering with best-in-class profitability. Under the leadership of Olli Isotalo, Neles will have the means to capitalise on both organic and inorganic growth opportunities, while continuing to focus on our customers’ needs and delivering intelligent solutions. Furthermore, Neles is expected to trade in line with the multiple level of flow control peers. I am confident that a focused control company with an attractive product offering, proven track record of strong performance, and compelling growth prospects will unlock further value for Metso’s current shareholders and new investors alike.”
“This is an industry-shaping combination that joins two unlikely complementary companies,” said Matti Alahuhta, Outotec Chairman. “It builds on Outotec’s technology competencies and Metso’s service capabilities. Metso Outotec’s global operating network, scale, wide technology and service offerings, and sustainable development principles will unlock significant benefits for all stakeholders. Metso Outotec will be in a position to take advantage of market opportunities globally, which, together with the significant synergies, will drive strong shareholder value. I am convinced that Metso Outotec will provide interesting opportunities to its employees, customers, and partners.”
“This is a unique opportunity to create value for our customers, employees, and partners globally,” said Pekka Vauramo, CEO of Metso. “Metso Outotec will have capabilities that will enable us to drive sustainable growth, while providing our customers with high-quality technology, equipment, and services that will ultimately improve their business. We will have an extensive global presence, complementary offering, strong services, and a large installed base. We also have excellent people. I am therefore eagerly waiting to join with Outotec’s personnel to begin our exciting journey together.”
“The combination of Outotec and Metso marks an important milestone in each company’s history and in Outotec’s strategic development,” said Markku Teräsvasara, CEO of Outotec. “I am excited about the many benefits that the combination will deliver for customers, employees, and ultimately shareholders, with the larger scale and combined strengths of both companies. Outotec has a compelling portfolio of technologies and capabilities that will be a catalyst for unlocking many of these benefits. I look forward to building a great new company together with the Outotec and Metso Minerals employees, as part of Metso Outotec.”
Read the article online at: https://www.worldcement.com/europe-cis/04072019/metso-minerals-and-outotec-combine-to-form-metso-outotec/