Metso Minerals Oy entered into a demerger plan and a combination agreement to acquire Outotec Oyj (HLSE:OTE1V) in a reverse merger transaction on July 4, 2019. Under the transaction, Metso Minerals and Outotec will combine and the combined company, comprising Metso Minerals and Outotec (but excluding Metso Flow Control), will be named “Metso Outotec”. The combination will be implemented through a partial Outotec demerger of Metso, in which all assets and liabilities of Metso that relate to Metso Minerals will transfer to Outotec in exchange for newly-issued shares in Outotec to be delivered to Metso shareholders. Outotec shareholders will continue to own their shares in Outotec. Upon completion, Metso shareholders will receive 4.3 newly-issued shares in Outotec for each share owned in Metso on the record date. The aggregate number of new shares in Outotec to be issued is expected to be 645.3 million shares. This implies Metso shareholders would own approximately 78.0% of the shares and votes of Metso Outotec, and Outotec shareholders would own approximately 22% of the shares and votes of Metso Outotec. In addition, Metso shareholders will retain their current shares in Metso Corporation. A €1.55 billion backup and term loan facilities agreement has been entered into with Nordea Bank Abp initially for the benefit of Metso but which, upon completion of the transaction, will transfer to Metso Outotec to address certain potential financing and refinancing needs arising from or in connection with the transaction.

Upon completion, Metso Corporation will be renamed as Neles Corporation and will be a separately listed entity focused on flow control, independent from Metso Outotec and 100% owned by Metso shareholders. Metso Minerals reported unaudited sales of €2.6 billion, operating profit of €283.2 million and EBITDA of €321.2 million for the financial year 2018. The current Chief Executive Officer of Metso, Pekka Vauramo, will become Metso Outotec's Chief Executive Officer, and the current Chief Executive Officer of Outotec, Markku Teräsvasara, will become the Deputy Chief Executive Officer of Metso Outotec. Eeva Sipilä will become the Chief Financial Officer and Deputy Chief Executive Officer of Metso Outotec. The Board of Metso Outotec will include Board members from both companies. It is proposed that Metso Outotec's Chairman will be Mikael Lilius and that the Vice Chairman will be Matti Alahuhta. Olli Isotalo will become Chief Executive Officer of Neles and will join Metso's management team as of July 15, 2019. As of June 25, 2020, Carita Himberg has been appointed senior Vice president, Human Resources and a member of the future Metso Outotec executive team. Metso Outotec's headquarters will be in Helsinki, Finland and it will maintain its listing on Nasdaq Helsinki. The combination agreement may be terminated by mutual written consent. Each of Metso and Outotec may further terminate the combination agreement inter alia if (i) the demerger has not been completed by September 30, 2020, (ii) the EGMs of Metso and/or Outotec have failed to approve the demerger, (iii) if any governmental entity (including any competition authority) gives an order or takes any regulatory action that is non-appealable and conclusively prohibits the completion of the demerger, or (iv) in case of a material breach by the other party of any of the representations, warranties, covenants or undertakings under the combination agreement if such breach has resulted, or could reasonably be expected to result, in a material adverse effect, as described in the combination agreement.

The transaction is subject to, among other items, approval by a majority of two-thirds of votes cast and shares represented at the respective EGMs of Metso and Outotec in respect of the transaction, and regulatory approvals including competition clearances. As the transaction is proposed to be implemented by way of a partial demerger of Metso, it is also subject to a statutory creditor hearing process of Metso's creditors. The transaction is unanimously recommended by the Boards of Metso and Outotec to their respective shareholders. Shareholders representing 33.6% of the shares and votes of Metso and shareholders representing 24.8% of the shares and votes of Outotec have irrevocably undertaken to vote in favor of the transaction. As of July 8, 2019, the term loan facilities agreement has been closed into with Nordea Bank.

As of October 7, 2019, the Finnish Financial Supervisory Authority approved the demerger prospectus relating to the combination of Outotec Oyj and Metso Corporations Minerals business. The Finnish Financial Supervisory Authority has approved a supplement to the Finnish language demerger prospectus on October 25, 2019. The Boards of Directors of Outotec and Metso have on September 11, 2019, proposed that the extraordinary general meetings of shareholders of Outotec and Metso, respectively, convened to be held on October 29, 2019, resolve on the Demerger in accordance with the Demerger Plan and approve the Demerger. As of October 29, 2019, the transaction is approved by shareholders of Metso. As on October 31, 2019, the Finnish Financial Supervisory Authority has approved a supplement to the prospectus prepared for the deal. The registration of the completion of the Demerger with the trade register maintained by the Finnish Patent and Registration Office is expected to take place in the second quarter of 2020, subject to the approval of the Demerger by the extraordinary shareholders' meetings of both Outotec and Metso, the statutory creditor hearing process and receipt of all required regulatory and other approvals, including competition clearances, and the demerger consideration shares are thereafter intended to be listed on the official list of Nasdaq Helsinki Ltd. As of November 29, 2019, the transaction was approved by United States Department of Justice. As of November 29, 2019, FTC granted the early termination notice. As of February 14, 2020, the Finnish Financial Supervisory Authority has approved a supplement to the prospectus prepared for the combination of Outotec and the Metso Minerals business. As of March 10, 2020, the transaction was approved by competition authorities in Australia, Russia, South Africa, and the Common Market for Eastern and Southern Africa (COMESA). On May 13, 2020, European Commission approved the transaction. As of March 30, 2020, The Finnish Financial Supervisory Authority approved a supplement to the Finnish language demerger relating to the combination of Outotec Oyj and Metso Corporation's Minerals business. European Commission approved the transaction on June 1, 2020. As of June 18, 2020, Competition Commission of India approved the transaction. The acquisition has received all the remaining outstanding competition clearances and required regulatory approvals. As of June 24, 2020, The Finnish Financial Supervisory Authority approved a supplement to the Finnish language demerger prospectus. Completion is expected in the second quarter of 2020. As of February 6, 2020 transaction is expected to close on June 30, 2020.

Morgan Stanley & Co. International plc acted as financial advisor and fairness opinion provider to Metso Corporation. Petri Haussila, Petri Avikainen, Mikko Hulkko, Janko Lindros, Tanja Törnkvist, Mark Powell, Martin Toto, Jonah Anderson, Richard Pogrel, John Reynolds, Tilman Kuhn, Jeremie Jourdan, Henrikki Harsu and Kristina Zissis of White & Case LLP acted as legal counsel to Metso. Goldman Sachs International acted as lead financial advisor and fairness opinion provider to the Board of Outotec. Hannes Snellman Attorneys Ltd. acted as legal counsel to Outotec. Nordea Bank Abp acted as local financial advisor to Outotec on certain matters. Sullivan & Cromwell LLP is advising Goldman Sachs International as financial adviser to Outotec Oyj in its €3 billion acquisition of Metso Minerals Oy.