Since last year, METSO’s paper and pulp machinery division operates as a separate company (see here). The apparent reason for this was the large divergence in growth perspective for automation/machinery for the mining industry on the one hand and the pulp&paper industry on the other hand.
The proposal was structured to enable the shareholders of both Metso and Weir to share in the very significant value creation that would result from material cost synergies in addition to further revenue synergies expected to be generated through the combination.
In keeping with the spirit of the merger proposal, Weir had proposed that the combined company would have a significant presence in, and a long term commitment to, Finland as well as the UK and would be listed in both Finland and the UK with full index inclusion in both countries, alongside shared management and board responsibilities.
Weir continues to believe that there is a compelling strategic rationale for bringing the two companies together in a merger structure. The Board of Weir believes that it has made an attractive merger proposal and there is no certainty that it will revise the terms of its proposal.
I do not know much about mergers and how they usually begin, but I think it is very interesting, from a sociological point of view, that both companies in their statements refer so openly to shareholder value creation. I have to think about this issue more, but in a sense it is worrying if companies are more interested in shareholder value creation than in providing good products and services (which probably both of the companies nonetheless do). I understand that this logic is followed in the context of listed companies, which means they are to a large extent dependent on the stock market to raise capital. But it in some way seems contradictory from the view of Corporate Social Responsibility.