The companies did not mention staff layoffs, But they did say they expect to save about $120 million in such duplicated services as distribution, purchasing, manufacturing and administration. Process automation and flow control will be a key growth area for the new company.
In the new company, each Rauma shareholder will receive 1.08917 shares and, and each Valmet shareholder one share. The largest shareholders of both companies say they will approve the merger: UPM-Kymmene Corp. as the largest shareholder in Rauma with a 34.5% stake, and the Finnish government as the major shareholder in Valmet with a 20% interest. In the merged company, Matti Sundberg, chief executive officer of Valmet, will be CEO, while Pertti Voutilainen, chairman of Rauma, will be chairman. The merger must meet the usual approvals from regulatory authorities and shareholders. It is expected to be completed by June 30, 1999.