Metso CEO Pekka Vauramo
Metso Minerals, subsidiary of global industrial company Metso, will merge with Finnish-listed technology company Outotec to form a leading process technology, equipment and services company serving the minerals, metals and aggregate industries.
The combined company, to be named Metso Outotec, is estimated to have combined sales of about €3.9-billion, or about €4.2-billion if Metso’s recently announced acquisition of screening and crushing equipment supplier McCloskey is included.
McCloskey is expected to complement the business profile of Metso Outotec, expanding and strengthening the aggregates business.
Metso Flow Control, which was part of Metso Minerals, will now be a pure-play listed entity under the name of Neles and will still be owned by Metso shareholders.
Metso on Thursday stated that Metso Outotec would benefit from strong free cash flow and a solid capital structure and would aim for an investment-grade credit rating in line with the current Metso rating.
The dividend policy for Metso Outotec will be determined by the board of the company following completion of the transaction. Metso Outotec is expected to have the capacity for an “attractive” dividend policy, consistent with Metso’s current dividend policy, while maintaining a strong balance sheet.
The transaction is expected to close in the second quarter of 2020.
MERGER TERMS
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.
Metso shareholders will hold about 78% of the shares and votes of Metso Outotec, and Outotec shareholders the balance.
Metso CEO Pekka Vauramo will take up the position of Metso Outotec CEO, while Outotec CEO Markku Teräsvasara will be deputy CEO.
The board of Metso Outotec will include board members from both companies. It is proposed that Metso Outotec's chairperson will be Mikael Lilius and that the vice-chairperson will be Matti Alahuhta.