Valmet Oyj — M&A Activity 2020

Oct 13, 2020

Valmet sustains its goal to merge Valmet and Neles

Valmet sustains its goal to merge Valmet and Neles

Valmet sustains its goal to merge Valmet and Neles

Valmet Oyj’s stock exchange release (inside information) on October 12, 2020 at
11:05 a.m. EET

Valmet announced on September 29, 2020 that it has approached the Board of
Directors of Neles with a proposal to start discussions on a potential statutory
merger between the two companies. The Board of Directors of Neles has this
morning announced a negative response to Valmet’s proposal.

After sending the first discussion proposal, Valmet has, based on the request of
the Board of Directors of Neles, further clarified its view on the strategic
rationale of the combination, the potential structure of the transaction
including a potential amount of capital return to the shareholders supporting an
efficient balance sheet while allowing future investments, and the synergy
potential.

Valmet has also made a proposal on the timetable and emphasized its willingness
to engage into discussions with an open dialogue and trust to clarify a more
specific merger proposal including a share exchange ratio. Unfortunately, Valmet
was not invited to discuss these topics in more detail with Neles.

Valmet has also raised its concern with the Board of Directors of Neles
regarding Alfa Laval possibly waiving its acceptance condition, according to
which the amount of tendered shares should be over two thirds (2/3) of the
issued and outstanding shares and votes of Neles, and potentially completing its
tender offer on a lower acceptance level. This would in Valmet’s view be
contrary to the interest of Neles and all its shareholders. To Valmet’s
understanding, this scenario has not been addressed in the recommendation of the
Board of Directors of Neles dated August 12, 2020.

As announced earlier, in Valmet’s view the combination of Valmet and Neles would
create excellent long-term value to the shareholders of both companies. It would
form a strong platform for further business growth especially in automation
systems and valves. Furthermore, the combination would be an exciting
opportunity for Neles’ and Valmet’s employees, as well as customers of both
companies who would benefit from the strength of the combined entity and
offering. The combination would create a Nordic based global leader with 16,000
employees, over EUR 4 billion in net sales, and leading market positions in its
respective segments.

For these reasons Valmet sustains its goal to merge Valmet and Neles, with a
strong view on the excellent long-term value potential to the shareholders of
both companies, the industrial logic and synergy potential. With a 29.5%
shareholding in Neles and with a solid underlying thinking on the long-term
shareholder value creation potential, Valmet’s proposal is carefully considered.
The negative response from the Board of Directors of Neles effectively deprives
its shareholders of the possibility to evaluate an alternative to Alfa Laval’s
offer.

Consequently, as a major shareholder of Neles, Valmet does not support the
recommendation of the Board of Directors of Neles to accept Alfa Laval’s tender
offer for all the shares and votes of Neles.

Further information, please contact:

Pasi Laine, President and CEO, Valmet, tel. +358 10 672 0001
Kari Saarinen, CFO, Valmet, tel. +358 50 317 1830
Anu Salonsaari-Posti, Senior Vice President, Marketing and Communications,
Valmet, tel. +358 10 672 0033
Pekka Rouhiainen, Director, Investor Relations, Valmet, tel. +358 10 672 0020

VALMET

Kari Saarinen
CFO

Pekka Rouhiainen
Director, Investor Relations

Valmet is the leading global developer and supplier of process technologies,
automation and services for the pulp, paper and energy industries. We aim to
become the global champion in serving our customers.

Valmet’s strong technology offering includes pulp mills, tissue, board and paper
production lines, as well as power plants for bioenergy production. Our advanced
services and automation solutions improve the reliability and performance of our
customers’ processes and enhance the effective utilization of raw materials and
energy.

Valmet’s net sales in 2019 were approximately EUR 3.5 billion. Our more than
13,000 professionals around the world work close to our customers and are
committed to moving our customers’ performance forward – every day. Valmet’s
head office is in Espoo, Finland and its shares are listed on the Nasdaq
Helsinki.

Read more www.valmet.com, www.twitter.com/valmetglobal

Follow Valmet IR on Twitter www.twitter.com/valmetir

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