The trend of mergers in the mining industry continued into July as Metso announced that it merging its main minerals technology business with Outotec.
The new company, to be called Metso Outotec, will be one of the leading technology suppliers to minerals processing companies globally, Metso said, with combined sales of 3.9 billion euros ($4.4 billion) in 2018.
The combination of Metso Minerals and Outotec is highly complementary and will create a unique company in the industry. Metso Outotec will leverage the strengths of both companies, including technology and R&D, product and process excellence, scale and global service offering footprint. The combination will deliver significant benefits to all stakeholders, Metso said in a release.
The deal is expected to enable cost savings of at least 100 million euros and revenue synergies, stemming from cross-sales opportunities, of at least 150 million euros a year.
“This is an industry-shaping combination that joins two uniquely complementary companies. It builds on Outotec’s leading technology competencies and Metso’s excellent service capabilities,” Outotec’s Chairman Matti Alahuhta said.
Direct global rivals include Sandvik, FLSmith and Terex among others.
On completion of the deal, Metso shareholders will own approximately 78 percent of the shares and votes in Metso Outotec, with existing Outotec shareholders holding the remainder.
“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,” Metso said in a statement.
In addition, Metso shareholders will retain their current shares in Metso, which will be renamed Neles. Neles’ 2018 sales would have totaled 593 million euros.
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 the CFO and Deputy CEO of Metso Outote.
The board of Metso Outotec will include board members from both companies. It is proposed that Metso Outotec’s Chairman will be Mikael Lilius and that the Vice Chairman will be Matti Alahuhta. The company’s headquarters will remain in Helsinki, Finland.