European company says it will improve its focus by spinning off divisions.
The board of directors for Helsinki-based Metso Corp. has announced that it is studying the potential separation of its pulp, paper and power businesses into a new company that would be listed on the various stock exchanges. Meanwhile, Metso would keep its current Mining and Construction and Automation businesses under the Metso name after the possible separation.
The goal of the spinoff would be to help both companies capitalize on their strengths in their respective markets faster and more efficiently.
Jukka Viinanen, Metso chairman, says 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.”
Matti Kähkönen, Metso president and CEO, says, "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."
The study relating to the possible separation will concentrate on a range of issues, including taxation and financing. Metso will also discuss the potential demerger with its customers, suppliers, rating agencies, creditors, employees and other relevant third parties.
Metso’s 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, after which the mining, construction and automation businesses would remain with Metso, whereas pulp, paper and power businesses would constitute the new company.
If approved, the demerger and listing of the new company’s shares would be expected to take place before the end of 2013.