Report
Expert Corporate Governance Service (ECGS)
EUR 1000.00 For Business Accounts Only

Metso - EGM 29 October 2019

In general, Metso is in compliance with the Finnish regulations relating to the
organisation and procedures of the Extraordinary General Meeting.
Under ITEM 6, the board of directors seeks approval of a partial demerger of Metso.
Pursuant to the proposal, it is proposed to carve out the Company's Minerals business
(through a partial demerger) and to combine it with the businesses of Finland-based
Outotec Oyj ("Outotec"). As a result of the partial demerger, Metso¶s current Flow Control
business will become the continuing business of the currently listed Metso, which will be
subsequently renamed Neles, an independent listed company supplying flow control
products and services.
First of all, ECGS endorses the strategic rationale for the (proposed) demerger and
agrees that the combination "could leverage the strengths of both companies, including
technology and R&D, product and process excellence, scale and global service offering
footprint".
As demerger consideration Metso's shareholders will receive 4.3 new shares in Outotec
for each share held in Metso, corresponding to an ownership in the combined company
following the completion of the demerger of 22% for the shareholders of Outotec and
78% for the shareholders of Metso.
As a matter of principle, ECGS is supportive towards corporate spin-offs as they give
shareholders the ability to choose whether they will continue to be exposed to the
µminerals, metals and aggregates industries¶(Metso-Outotec) and/or µsupply of flow
control products and services¶(Neles), if not they can simply sell their shares.
In ECGS¶view, the new company (Metso-Outotec) will have sufficient substance to
operate on a stand-alone basis
Based on the analysis above, ECGS recommends to vote FOR the demerger plan.

Underlying
Metso Corp.

Metso is a global services, products and systems provider. Co. serves its customers in mining, oil and gas as well as aggregates industries. Co. serves also some other process industries, such as pulp and paper industry. Co.'s offerings to the mining industry include grinding mills, mill linings and grinding media; as well as crushers and screens. Co.'s offerings to the aggregates industry include crushers; as well as screens, feeders and conveyors. Co.'s offerings to the oil and gas industry include control valves, on-off valves; intelligent safety valves; intelligent valve controllers and limit switches; intelligent field services; spare and wear parts; as well as performance services.

Provider
Proxinvest
Proxinvest

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Analysts
Expert Corporate Governance Service (ECGS)

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