Metso to Buy Aker Kvaerner's Pulping and Power Business
Feb. 8, 2006 (Press Release) - Metso and Aker Kvaerner have signed a Letter of Intent whereby Metso intends to acquire all parts of Aker Kvaerner's Pulping and Power business. The acquisition is subject to, among other things, completion of the due diligence process conducted by Metso, and signing of the final sale and purchase agreement. The parties aim to sign the final agreement by mid April 2006. The final closing will require relevant regulatory approvals. The agreed cash and interest-bearing debt free enterprise value is Euro 335 million, which is subject to closing adjustments.
The acquisition will enable Metso Paper to complement its Fiber Business Line's product scope with Aker Kvaerner's technology. Following the successful completion of the transaction, Metso Paper will be able to deliver all core processes for modern pulp mills, including chemical pulping lines, chemicals recovery and power generation for pulp and paper production based on modern state-of-the-art technology. As a result, Metso Paper will enhance its service capability globally with a wide and advanced product offering and life cycle services.
"The deal fits well with our strategy of profitable growth. The demand for complete chemical pulp mill processes has developed favorably in recent years, especially in South America and Asia, and we expect the positive development to continue. In light of this, we see the acquisition of Aker Kvaerner Pulping and Power business as an excellent opportunity to complement both our technology base and our customer service in chemicals recovery and hardwood pulping processes," notes Risto Hautamäki, President of Metso Paper. "Nowadays the customers increasingly require complete pulping solutions from one supplier. The combination of Metso Paper and Aker Kvaerner technologies would meet their demands on this front. There is also exciting potential for synergies in research and development, as well as in, for example, logistics and purchasing."
Aker Kvaerner's Pulping and Power business has approximately 2,000 employees, with main operations in Sweden, Finland, USA, Canada, Japan and Brazil. In 2005, it had net sales of Euro 565 million and recorded Euro 35 million operating profit after corporate allocations. The order backlog on December 31, 2005 was Euro 600 million.
Metso Paper's Fiber Business Line serves the pulp and paper industry with chemical, mechanical and recycled fiber technologies and related services. In 2005, the Fiber Business Line's net sales were Euro 489 million. It has some 2,000 employees with main locations in Finland and Sweden.
Aker Kvaerner is one of the world's largest contractors to the oil, gas and process industries. In 2004, the aggregated revenues were Euro 3.7 billion with 22,000 employees.
Metso is a global engineering and technology corporation with 2005 net sales of approximately Euro 4.2 billion. Its 22,000 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. Metso Paper's net sales in 2005 were Euro 1,702 million.