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Metso merger creates a leading gear player

01 January, 2000

Metso, the US-Finnish group formed last July by the merger of Valmet and Rauma, has bought a majority stake in the industrial gear operations of the Finnish firm Santasalo-JOI.

Metso has also announced that is considering selling its Valmet hydraulic motors business. The acquisition of Santasalo, for around €40m (£25m), will boost the annual sales of Metso`s gear business to almost €120m (£75m), making it one of the world`s largest gear-producers.

Following the deal, Metso`s gear and components business will adopt the Santasalo name. About 405 Santasalo employees will be transferred to the enlarged operation which includes Metso`s Parkano Gears business. Metso is targeting established customers in sectors such as timber and paper-making, as well as emerging industries such as wind power.

After the merger, Valmet will still represent about half of Metso`s gears business. The Nordic countries will account for around 58% of the new organisation`s sales. In an allied move, Metso has signed a global sales and distribution deal with SEW-Eurodrive, which owns a third of Santasalo`s gear business.

The agreement will give Metso a new distribution channel for its gear products. Metso has hired a consultant to investigate the possible sale of its Valmet Hydraulics business which produces hydraulic motors mainly for mobile agricultural applications and forestry machinery.

The business, based in Finland, employs 117 people and in 1998 recorded sales worth €20m (£12.5m). Metso`s total business is worth around €3.7bn (£2.3bn) and the company employs about 23,000 people worldwide.




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