Neles’ Extraordinary General Meeting was held on Wednesday, September 22, 2021 at 10 a.m. local time.

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Resolutions of Neles Corporation’s Extraordinary General Meeting

Resolution on the merger

The General Meeting resolved to approve the Merger Plan regarding the merger between Neles and Valmet and the merger of Neles into Valmet in accordance with the Merger Plan. Pursuant to the Merger Plan, Neles would be merged into Valmet through an absorption merger, so that all assets and liabilities of Neles would be transferred without a liquidation procedure to Valmet in a manner described in more detail in the Merger Plan. The merger has been described in more detail in the stock exchange release published by Neles on July 2, 2021. Pursuant to the Merger Plan, the shareholders of Neles shall receive as merger consideration 0.3277 new shares of Valmet for each share they hold in Neles.

The completion of the merger is conditional upon the satisfaction of the conditions for completion set out in the Merger Plan, or the waiver thereof by Valmet and Neles. In addition to the approvals of the Extraordinary General Meetings of both companies, these conditions include, among others, that necessary merger control and other regulatory approvals have been obtained and that the extra distribution of funds by Neles referred to in the Merger Plan has been executed prior to the completion of the merger, as well as the completion or waiver of other conditions set forth in the Merger Plan.

The planned effective date of the merger is January 1, 2022, but the effective date may change, as described in the Merger Plan, depending inter alia on the satisfaction of the conditions for completion of the merger.

One shareholder, representing 3,000 shares and votes, made a demand at the General Meeting for the redemption of its shares in Neles, in accordance with Chapter 16, Section 13 of the Finnish Companies Act.

Resolution to authorize the Board of Directors to resolve upon an extra distribution of funds

Based on the Combination Agreement and Merger Plan between Neles and Valmet, Neles may at any time prior to the execution of the merger resolve to distribute to its shareholders an extra distribution of funds in the amount of up to EUR 2.00 per share. The General Meeting resolved to authorize the Board of Directors of Neles to resolve, before the completion of the merger, on an extra distribution of funds not exceeding EUR 2.00 per share to be paid either as dividend from the company's retained earnings or return of equity from the company's fund for invested unrestricted equity or a combination of the two. The authorization is in force until the opening of the next Annual General Meeting of the company.

Neles will separately publish its Board of Directors' resolution to distribute funds based on the authorization and will simultaneously confirm the applicable record and payment dates. Funds paid on the basis of the authorization will be paid to shareholders who are registered as shareholders in Neles' shareholders' register on the record date of the distribution of funds.

Notice to the meeting

Notice is given to the shareholders of Neles Corporation (“Neles” or the ”Company”) that the Extraordinary General Meeting is to be held on Wednesday, September 22, 2021 at 10:00 a.m. Finnish time at Hilton Helsinki Airport hotel at the address Lentäjänkuja 1, 01530 Vantaa, Finland. The reception of persons that have registered for the meeting and the distribution of voting tickets will commence at 9:15 a.m.

In order to reduce the risk of infection resulting from the coronavirus (COVID-19) situation, Neles will seek to keep the General Meeting as short as possible and to limit the number of participants. The participation of the members of the Company’s Board of Directors and Executive Team will be kept to a minimum.

For the same reason, the Company respectfully requests that its shareholders give serious thought to whether it is necessary for them to participate in the General Meeting at the meeting venue in person or represented by a representative other than the proxy representative designated by the Company. Shareholders are advised to primarily follow the meeting online via webcast and to vote in advance or to participate in the meeting by way of proxy representation arranged by the Company. Shareholders also have a possibility to submit questions concerning matters on the agenda of the Extraordinary General Meeting in advance. 

No catering will be arranged in connection with the meeting.

Merger Prospectus

Merger Plan

Auditor's statement to the extraordinary general meeting of Neles Corporation

Statement by the board of directors on the events having a material effect on the position of Neles Corporation after the H1 Review

Key dates relating to EGM 2021

Proposals by the Board of Directors

Introduction

Neles announced on July 2, 2021 the signing of a combination agreement (the "Combination Agreement") with Valmet Corporation ("Valmet") and the proposed combination of Neles and Valmet's business operations through a statutory absorption merger of Neles into Valmet pursuant to Chapter 16 of the Finnish Companies Act whereby all assets and liabilities of Neles would be transferred without a liquidation procedure to Valmet (the "Merger"). As a consequence of the completion of the Merger, Neles would be dissolved and automatically cease to exist as a separate legal entity. The shareholders of Neles would receive new shares in Valmet as merger consideration in proportion to their shareholding in Neles upon completion of the Merger.

The purpose of the Merger is to create a leading company with a unique, competitive and balanced total offering for process industries globally, with strong positions in its respective segments including paper, board, pulp and energy technologies, flow control, automation systems and services. The combined company's business is expected to benefit from diversified product platforms, end markets and customers with relevant scale in key markets and an ideal positioning to benefit from the strong sustainability focus in the combined company’s end markets through megatrends such as energy transition and increasing demand for renewables.

Reference is made to the public announcement on the Merger dated July 2, 2021 for further information about its rationale and details.

In order to complete the Merger, the Board of Directors of Neles proposes that the Extraordinary General Meeting would resolve on the statutory absorption merger of Neles into Valmet in accordance with the merger plan approved by the Boards of Directors of Valmet and Neles dated July 2, 2021 and thereafter registered with the trade register maintained by the Finnish Patent and Registration Office on July 9, 2021 (the "Merger Plan").

Shareholders holding in aggregate approximately 15.4 percent of the shares and votes in Neles, including Cevian Capital Partners Limited, Ilmarinen Mutual Pension Insurance Company, Elo Mutual Pension Insurance Company and Varma Mutual Pension Insurance Company, have subject to certain customary conditions irrevocably undertaken to attend the Extraordinary General Meeting and to vote in favor of the Board of Directors' proposals regarding the Merger and the dividend authorization set out in this agenda item and agenda item 7 below. In addition, Valmet which holds approximately 29.54 percent of the shares and votes in Neles has undertaken to vote in favor of these resolutions.

Resolution on the Merger

Pursuant to the Merger Plan, Neles would be merged into Valmet through an absorption merger, so that all assets and liabilities of Neles would be transferred without a liquidation procedure to Valmet in a manner described in more detail in the Merger Plan.

The Board of Directors of Neles proposes that the Extraordinary General Meeting resolves on the Merger of Neles into Valmet in accordance with the Merger Plan and approves the Merger Plan. The general meeting can only approve or reject the proposed Merger in accordance with the Merger Plan but cannot alter it.

Pursuant to the Merger Plan, the shareholders of Neles shall receive as merger consideration 0.3277 new shares of Valmet for each share they hold in Neles (the “Merger Consideration”). In case the number of shares received by a shareholder of Neles as Merger Consideration (per each individual book-entry account) is a fractional number, the fractions shall be rounded down to the nearest whole number. Fractional entitlements to new shares of Valmet shall be aggregated and sold in public trading on Nasdaq Helsinki Ltd and the proceeds shall be distributed to shareholders of Neles entitled to receive such fractional entitlements in proportion to their holding of such fractional entitlements. Any costs related to the sale and distribution of fractional entitlements shall be born by Valmet.

The final total number of shares in Valmet to be issued as Merger Consideration shall be determined on the basis of the number of shares in Neles held by shareholders of Neles, other than Neles itself and Valmet, at the end of the day preceding the execution of the Merger. Such total number of shares to be issued as Merger Consideration shall be rounded down to the nearest full share.

Based on the number of issued and outstanding shares in Neles on the date of this notice, a total of 34,664,986 new shares in Valmet would be issued to shareholders of Neles as Merger Consideration. This would correspond to approximately 18.8 percent ownership in Valmet for Neles’ shareholders and approximately 81.2 percent ownership in Valmet for Valmet’s shareholders after the Merger.

A shareholder of Neles, who votes against the Merger in the Extraordinary General Meeting, has the right as referred to in Chapter 16, Section 13 of the Finnish Companies Act to demand redemption of his/her/its shares at the Extraordinary General Meeting. 

Resolution to authorize the Board of Directors to resolve upon an extra distribution of funds

Based on the Combination Agreement between Neles and Valmet, Neles may at any time prior to the execution of the Merger distribute to its shareholders an extra distribution of funds in the amount of up to EUR 2.00 per share either as dividend or return of equity from the Company's fund for invested unrestricted equity or a combination of the two.

In order to enable the above-mentioned extra distribution of funds, the Company's Board of Directors proposes to the Extraordinary General Meeting that the Extraordinary General Meeting would authorize the Board of Directors to resolve, before the completion of the Merger, on a distribution of funds not exceeding EUR 2.00 per share to be paid either as dividend from the Company's retained earnings or return of equity from the Company's fund for invested unrestricted equity or a combination of the two.

The authorization would be in force until the opening of the next Annual General Meeting of the Company.

The Company will separately publish its Board of Directors' resolution to distribute funds based on the authorization and will simultaneously confirm the applicable record and payment dates. Funds paid on the basis of the authorization will be paid to shareholders who are registered as shareholders in the Company's shareholders' register on the record date of the distribution of funds.

INFORMATION REGARDING THE REDEMPTION PROCESS UNDER CHAPTER 16 SECTION 13 OF THE FINNISH COMPANIES ACT

A shareholder of the merging company in a statutory merger (here Neles Corporation) has a statutory right to make a demand concerning the redemption of all his/her/its shares at the Extraordinary General Meeting of Neles Corporation to be held on September 22, 2021 and resolving on the merger between Neles Corporation and Valmet Corporation. Such redemption demand must be made in the General Meeting before the decision on the merger is made. Shares may be redeemed only if they have been notified to be entered into the book-entry account of the shareholder demanding redemption by the record date referred to in Chapter 5 Section 6a of the Finnish Companies Act. A shareholder who demands redemption must vote against the merger decision.

Additional information on the redemption process is set out in the following:

  1. The shareholder’s right to demand redemption applies only to those shares which the shareholder has owned on the record date of the General Meeting, i.e. September 10, 2021.
  2. The shareholder must register for the General Meeting and make a demand for redemption in the General Meeting before the decision on the merger is made either in person or by participating by a proxy representative. Instructions and the proxy document necessary for making a redemption demand through the company-designated proxy representative. 
  3. The shareholder who demands redemption must vote against the merger decision.
  4. The fair price of the shares at the time preceding the merger decision shall serve as the redemption price. The redemption price will be determined in arbitration proceedings concerning the redemption (see item 5).
  5. A shareholder who has demanded redemption of his/her/its shares and voted against the merger is required to submit an application to the Redemption Board of the Finland Chamber of Commerce in order to initiate arbitral proceedings concerning the redemption and to serve notice of the application to Valmet Corporation within one month after the General Meeting. Valmet Corporation shall bear the costs of the arbitration, unless the arbitrators for a special reason deem that it is reasonable to order otherwise.
  6. Once the arbitral proceedings have been initiated the shareholder shall only have a right to the redemption price and possible interest. The interest on the redemption price is determined on the basis of the reference rate set out in Section 12 of the Finnish Interest Act, which is currently 0.00%. If it is later determined in the redemption proceedings that the shareholder has no right of redemption, the shareholder shall have a right to merger consideration in accordance with the merger plan. If the merger lapses, also the redemption proceedings shall lapse.
  7. The redemption price will be paid after the award or judgment on the matter has become final and binding, and in any event not before the implementation of the merger.

A shareholder who no longer wishes to hold Neles Corporation shares and does not wish to receive Valmet Corporation shares as merger consideration can always sell his/her/its shares on Nasdaq Helsinki. Holding shares at the time of the implementation of the merger is a prerequisite for receiving the merger consideration.

Pursuant to the merger plan, the implementation of the merger is conditional, among other things, upon shareholders of Neles Corporation representing no more than twenty (20) per cent of all shares and votes in Neles Corporation having demanded the redemption of his/her/its shares, unless Neles Corporation and Valmet Corporation waive this condition.

The Company will arrange an opportunity for shareholders who have registered for the meeting to follow the meeting online via a webcast. A link to join the webcast will be sent to the shareholders who have implicated that they want to follow the webcast. Should the shareholder want to follow the webcast, one should choose the option from the registration from, give a valid email and allow the messages related to the webcast. Shareholders are asked to take into account that following the meeting via webcast is not considered as participation in the General Meeting and that it is not possible for shareholders to exercise their rights in the General Meeting through the webcast. It is recommended for shareholders to exercise their voting rights in advance or alternatively by proxy representation (instructions above) in addition to following the General Meeting via the webcast.

The Company is offering shareholders the possibility to submit questions concerning matters on the agenda of the General Meeting in advance. The advance questions must be submitted by email to the address jatta.nylund@neles.com by September 8, 2021 at 10 a.m. Such advance questions do not constitute information requests pursuant to Chapter 5, Section 25 of the Finnish Companies Act but the Company will seek to address the questions on this page by September 13, 2021 and during the meeting to the extent possible.

Pursuant to Chapter 5, Section 25 of the Finnish Companies Act, a shareholder who is present at the General Meeting has the right to request information with respect to the matters to be considered at the meeting.

On the date of the notice the total number of shares and votes in Neles Corporation is 150,348,256. The total amount includes 150,361 treasury shares held by the Company. Such treasury shares held by the Company do not have voting rights.

Changes in shareholding after the record date of the Extraordinary General Meeting do not affect the right to participate in the General Meeting or the number of voting rights held in the General Meeting.

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