Stock Exchange release September 26, 2008 08:30:00 AM CET
Metso and Wärtsilä form joint venture for renewable energy solutions
Metso Corporation Company release on September 26, 2008 at 9:30 a.m.
Metso and Wärtsilä have signed a contract to form a joint venture combining Metso's Heat & Power business (a business unit within Metso Power) and Wärtsilä's Biopower business. The new joint venture will be one of Europe's leading providers of medium- and small-scale power and heating plants, focusing on renewable fuel solutions. The closing of the transaction will require the relevant regulatory approvals, which are expected during the coming months.
Metso will own 60 percent and Wärtsilä 40 percent of the joint venture. It is estimated that in 2008 the consolidated annual pro forma net sales of the joint venture would be approximately EUR 130 million and the number of employees approximately 200.
Through this joint venture, Metso Power, a leading boiler technology company, and Wärtsilä Biopower, a leading modularized power plant supplier, will combine their resources and expertise in sustainable energy production. The technology offerings of the two businesses - Wärtsilä's grate and Metso's fluidized bed combustion technologies - are complementary and enable solution offerings for a wide range of fuels in power plants.
"The general market outlook for the energy industry and especially for renewable energy production is promising. With Metso and Wärtsilä now joining forces, we will have enhanced capabilities to build and develop new technologies and solutions," says Lennart Ohlsson, President of Metso Power.
"Fuel flexibility will be an important competitive edge in the future, and the joint venture will be well positioned to meet this challenge. We expect that there will be a high demand for the products, services and expertise of the combined entity," says Christoph Vitzthum, Group Vice President, Wärtsilä Power Plants.
The demand for power plants capable of running on renewable fuels has increased as a result of high energy prices and increased global energy consumption. The European Union target to increase the share of energy based on renewables to 20 percent of primary energy by 2020 is a major factor behind this joint venture.
Metso's Heat & Power business consists of Noviter Oy and VEÅ AB, both subsidiaries of Metso Power. The business unit employs approximately 100 people in Scandinavia, the Baltic countries and Russia. Metso Power designs and manufactures power generation and chemical recovery systems for energy producers and the pulp and paper industry globally.
Wärtsilä Biopower, a part of Wärtsilä Power Plants, supplies and manufactures biomass-fueled combined heat and power plants and heating plants. The company employs approximately 100 people in Finland. Wärtsilä's engine-based power plant business is not affected by this joint venture and continues to offer a broad range of fuel-flexible power solutions.
Metso is a global engineering and technology corporation with 2007 net sales of over EUR 6 billion. Its over 27,000 employees in approximately 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. www.metso.com
Wärtsilä enhances the business of its customers by providing them with complete lifecycle power solutions. When creating better and environmentally compatible technologies, Wärtsilä focuses on the marine and energy markets with products and solutions as well as services. Through innovative products and services, Wärtsilä sets out to be the most valued business partner of all its customers. This is achieved by the dedication of more than 17,000 professionals manning 160 Wärtsilä locations in 70 countries around the world. Wärtsilä's net sales in 2007 were EUR 3.8 billion. Wärtsilä is listed on The Nordic Exchange in Helsinki, Finland. www.wartsila.com
Further information for the press, please contact:
Jorma Lehtoviita, Vice President, Heat & Power, Metso Power, +358 400 623 079 (in Finland)
Lennart Ohlsson, President, Metso Power, +46 706 001 359 (in Sweden)
Further information for investors, please contact:
Johanna Sintonen, Vice President, Investor Relations, Metso Corporation, tel. +358 20 484 3253
It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for customer industry profitability and investment willingness, expectations for company growth, development and profitability and the realization of synergy benefits and cost savings, and statements preceded by "expects", "estimates", "forecasts" or similar expressions, are forward-looking statements. These statements are based on current decisions and plans and currently known factors. They involve risks and uncertainties which may cause the actual results to materially differ from the results currently expected by the company.
Such factors include, but are not limited to:
(1) general economic conditions, including fluctuations in exchange rates and interest levels which influence the operating environment and profitability of customers and thereby the orders received by the company and their margins
(2) the competitive situation, especially significant technological solutions developed by competitors
(3) the company's own operating conditions, such as the success of production, product development and project management and their continuous development and improvement
(4) the success of pending and future acquisitions and restructuring.
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