METSO Corp., parent company of Finland's Nordberg Group, have made a recommended cash offer of SEK9,118 million (£696 million) to acquire the entire stock of Svedala Industri AB of Sweden.
Metso say it is their intention to combine Nordberg with Svedala to create one of the global market leaders in the supply and service of processes and related equipment for the mineral processing, civil engineering and construction industries.
'Combining the businesses will allow Nordberg and Svedala to better address the rapidly evolving needs of increasingly global customers in a consolidating but growing industry,' said Heikki Hakala, president and CEO of Metso Corp.
Svedala's chairman, Rune Anderson, added: 'The combination of Metso and Svedala has compelling industrial logic and we consider it to be positive for our customers and employees.'
Following the acquisition, Metso plan to maintain the main brand names of both companies but will integrate their various manufacturing, service and distribution operations. The combined business will result in significant synergy benefits and is expected to enhance earnings per share in its first full year of consolidation.
In 1999 the combined net sales of Metso and Svedala totalled EUR4.8 billion (£3.0 billion), with rock and mineral processing contributing 42% of this figure.
Subject to the approval of shareholders and the relevant competition authorities, the transaction should be completed towards the end of September 2000.