Valmet announced today its goal to merge valve manufacturer Neles into the company.
According to Valmet, it has today approached the board of Neles with a proposal to start discussions on a possible merger.
Read more: The battle for the Four continues: Valmet is now proposing to the government to merge
At a press conference today, Valmet said why it did not disclose even more detailed information about the conditions under which it is ready for the merger with Neleks.
- We first want to negotiate with Neles' Board of Directors, said Pasi Laine, President and CEO of Valmet.
As this is a merger, Necs's shareholders would become Valmet's shareholders in the merger.
Laine emphasized that a large part of Neles' shareholders are also Valmet's shareholders.
In addition, Laine pointed out that Valmet already owns nearly 30 percent of Neleks.
According to Laine, the interests of both Necs and Valmet's shareholders are to be taken into account, although he acknowledged that the valuation of Necs' share is more expensive than Valmet.
For this reason, there is enough wood in the exchange ratio.
Neles, which split from Metso, was listed on the Helsinki Stock Exchange at the beginning of July.
Valmet already had a significant holding in the company at that time.
According to Laine, Valmet originally had a plan to follow Necs' development in peace from the company's board of directors, but Sweden's Alfa Laval's takeover bid surprised and forced it to act more quickly.
Neles would be a good addition
The press conference emphasized that Neles would support Valmet's current offering of paper and board machines, pulp technology, automation and services.
- Neles is a valve company that has grown comfortably in recent years, Laine said.
The business of the combined company would be growing and stable, he said.
The merger would also bring savings relatively quickly.
- The combined company would provide a starting point to further increase automation, Laine said.
Additional acquisitions would also be possible.
Neles provided Valmet with revenue growth opportunities in the process industry.
Four valves, for example, are strong in pulp but not in paper and board.
Both companies have an extensive service network and the same customers.
Laine emphasized that Valmet and Neleks have a common history, when both previously belonged to Metso.
There, Laine led Neles' operations.
- Merging would be easy and low risk.
We know the Four, and it knows us.
Laine did not respond to whether Valmet's offer book would be published before October 22, when the offer made by the Swedish Alfa Laval for Neleks expires.
- We have now approached the Neles government and are waiting for their response.
The timing will, of course, depend on the reaction of the Neles government and how quickly the negotiations continue.
Laine expects Neles' board to welcome the merger plan.
Approval of the merger requires two-thirds of the votes of the general meeting of both companies.