Alfa Laval and Neles Corporation have entered into a combination agreement pursuant to which Alfa Laval will make a voluntary recommended public cash tender offer for all issued and outstanding share in Neles.
Neles and Alfa Laval would create a strong global player in the flows control market, writes Alfa Laval. The companies' combines sales for the twelve months ended on 31 March was SEK53.8bn (Alfa Laval: SEK47.0bn and Neles €642m) and the combined headcount amounted to 20,300 employees.
Alfa Laval offers solutions based on key technologies of heat transfer, separation and fluid handling for areas like food production, biotech, energy, water and waste treatment, chemicals and many others. The company has 42 major production hubs and over 17,000 employees. Neles is a global provider of flow control solutions, valves and valve automation technology for the oil and gas refining, pulp, paper and bioproducts industries. The company has 2,900 employees.
The offered price will be €11.50 per share, valuing Neles' total equity at €1.727m, Alfa Laval informs. The members of the board of directors of Neles who participated in the decision-making have unanimously decided to recommend that the shareholders of Neles accept the tender offer. Cevian Capital, which holds 10.9 per cent in Neles, has already accepted the offer, writes Alfa Laval.
The offer period is expected to start on 13 August and to close on 22 October. If Alfa Laval obtains more than 90 per cent of the issued and outstanding shares and votes in Neles, the company intends to initiate mandatory redemption proceedings in accordance with the Finnish Companies Act to acquire the remaining shares in Neles, and thereafter to cause Neles' shares to be delisted from Nasdaq Helsinki.
Should Alfa Lavall obtain less than 90 per cent, but more than two-thirds in Neles, the company would assess alternatives to acquire the remaining shares and votes in Neles over time.
Valmet: offer not beneficial for Neles
Valmet, which just acquired 14.88 per cent in Neles on 1 July 2020, was not very enthusiastic about the offer.
"Neles is a good quality company with a strong position in the pulp and paper industry and other process industries. Valmet and Neles have a common heritage, serve similar global industries and benefit from same global megatrends. Valmet sees a good amount of value in Neles and with the previously announced share acquisition our target is to participate in developing the company further. Therefore, as a Neles shareholder, Valmet does not consider Alfa Laval's tender offer to be beneficial for Neles. Valmet will continue as an active shareholder of Neles," says Pasi Laine, President and CEO of Valmet.
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