Aker Kvaerner to sell Pulping and Power businesses to Metso
After many years of determined and focused efforts to build a strong pulping and power business, Aker Kvaerner has signed a letter of intent to sell these businesses to Metso. The transaction will allow the Pulping and Power businesses to continue to grow under a new ownership, and Aker Kvaerner will free up financial and human resources to concentrate efforts on other core areas. The transaction value is estimated to be approximately NOK 3 billion, subject to closing adjustments.
The acquisition is subject to completion of the due diligence process by Metso, signing of the final sale and purchase agreement, and obtaining the relevant regulatory approvals. The parties aim to sign the final agreement by mid April 2006.
For Aker Kvaerner, the deal will have a positive net cash effect of approximately NOK 2.6 billion. Net gain for Aker Kvaerner compared to book value of the businesses is estimated to be a total of NOK 2.4 billion. Aker Kvaerner will continue to operate Pulping and Power until the transaction has been finally concluded. The parties have agreed to an adjustment mechanism for the transaction price where Aker Kvaerner will retain changes in the equity from October 2005 until the final closing of the deal.
“We are pleased with the improvements we have achieved in the Pulping and Power businesses over the last few years, with remarkable growth and with technology and systems which in some areas are leading within this industry,” says Inge K. Hansen, President and CEO in Aker Kvaerner. “The market is increasingly asking for deliveries of an even more complete range of products and services. We firmly believe that the new home for these two business units, integrated with Metso’s operations, will enable them to achieve the further growth prospects that they are capable of and open up new industrial opportunities as they go forward,” says Mr. Hansen.
Of Aker Kvaerner’s 22 000 employees serving the international oil, gas and process industries, the Pulping and Power businesses have approximately 2 000 employees with main operations in Sweden, Finland, USA, Canada, Japan and Brazil. In 2005, the Pulping and Power business had operating revenues of NOK 4 523 million, an EBITDA of NOK 329 million and an EBIT of NOK 279 million. The order backlog at 31 December 2005 was NOK 4 819 million.
Finnish based 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 EUR 489 million. It has some 2 000 employees with main locations in Finland and Sweden.
The acquisition will enable Metso Paper to complement its Fiber business line’s product scope with Aker Kvaerner’s leading technology. Following the successful completion of the transaction, Metso Paper will be able to deliver all processes for modern pulp mills, including chemical pulping lines, chemicals recovery and power generation for pulp and paper production. As a result, Metso Paper will be able to serve its pulp and paper customer 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 chemical pulp mill processes has developed favourably 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’s 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.
Metso Paper is part of Metso, a global engineering and technology corporation with 2005 net sales of approximately EUR 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.
A press conference and analyst briefing will be held in the auditorium of Aker Kvaerner’s headquarters in Professor Kohts vei 15, Lysaker, Norway at 13.00 CET today.
For further information, please contact:
Lasse Torkildsen, Vice President, Investor Relations, Aker Kvaerner. Tel: +47 67 51 30 39, Mob: +47 911 37 194
Johanna Sintonen, Vice President, Investor Relations, Metso Corporation. Tel. +358 204 84 3253
AKER KVÆRNER ASA, through its subsidiaries and affiliates (“Aker Kvaerner”), is a leading global provider of engineering and construction services, technology products and integrated solutions. The business within Aker Kvaerner comprises several industries, including Oil & Gas, Refining & Chemicals, Mining & Metals, Pharmaceuticals & Biotechnology, Power Generation and Pulp & Paper. The Aker Kvaerner group is organised into two principal business streams, namely Oil & Gas and E&C, each consisting of a number of separate legal entities. Aker Kvaerner is used as the common brand/trademark for most of these entities.
The parent company in the group is Aker Kværner ASA. Aker Kvaerner has aggregated annual revenues of approximately NOK 35.6 billion and employs approximately 22,000 people in more than 30 countries.
Aker Kvaerner is part of the Aker Group (www.akerasa.com), a leading multi-industry powerhouse with more than 40 000 employees and NOK 60 billion revenues. Aker owns 50.01 per cent of Aker Kvaerner, and the group is also a major European shipbuilder and a significant participant in the fisheries industry.
Kvaerner Power is the leading chemical recovery equipment supplier in the world with its 300 recovery boilers and 300 evaporation unit deliveries. Kvaerner Power is also a forerunner in large scale fluidized bed combustion for pulp and paper industry and power producers. Approximately 200 power boilers in operation testify to the expertise in fluidized bed technology with demanding fuels. Kvaerner Power has designed and manufactured the world’s largest recovery units and biomass-fired fluidized bed boilers. Kvaerner Power with main operations in Finland, Sweden, USA and Brazil has annual revenues of approximately EUR 400 million and it employs 1400 people worldwide.
Kvaerner Pulping is a leading supplier of machines, process systems and service to the world-wide pulp and paper industry. Kvaerner Pulping, with headquarters in Karlstad, Sweden, has 630 employees in 12 countries around the world. Kvaerner Pulping is committed to continuously improving its customers’ products, productivity and profitability through the delivery of innovative technical solutions. Kvaerner Pulping offers the full range of engineering, procurement and construction services, from single machines to complete fiberlines and white liquor plants.
This press release may include forward-looking information or statements and is subject to our disclaimer, see our web-pages www.akerkvaerner.com
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- Torbjørn Andersen
- SVP Group Communications
- Aker Kvaerner
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