Metso Outotec (Mo Group)

Background of Metso and Outotec

Outotec’s history started in 1940 as a state-owned copper company, Outokumpu, where they came up with the idea of manufacturing copper without the aid of external energy. The flash smelting method thrived and as a result, a new technology unit was founded. This unit was later named Outokumpu Technology.Metso was founded in 1999 when Valmet and Rauma merged. In 2013, Metso demerged into two separate publicly traded companies. Metso’s pulp, paper and energy production business units formed Valmet Oyj while mining, construction and automation business units formed Metso Oyj.

Background of the merger

In July 2019, it was announced that Outotec and Metso Minerals will be combined, forming a new organization called Metso Outotec. Simultaneously, Metso’s valve business area, Metso Flow Control, would be demerged and renamed Neles. The goal of the merger was to create a company that offers process technology, equipment and services for minerals, metals, and aggregates business areas. Matti Alahuhta, the chair of the board of Metso Outotec, stated that Metso Minerals and Outotec complemented each other exceptionally well, since almost none of their operations were overlapping but rather consequent in the industry value chain. Also, the customers were from different parts of the world: Metso Minerals was focused on North and South America, whereas Outotec’s customers were located in Europe, Middle East and Africa. It was estimated that the merger would create 100 million euros in cost savings and 150 million euros in cost synergies due to combining the business operations.The merger was officialized in an auxiliary general meeting held in October 2019. According to prior information, the biggest investors were in favor of the merger. The merger also had to be approved by the competition authority.European Commission accepted the merger in May 2020. Metso’s owners received most of the new company, 78%. Metso’s CEO Pekka Vauramo was appointed as the CEO of Metso Outotec. Outotec’s CEO Markku Teräsvasara was appointed as the executive vice president. Mikael Lilius, the chair of the board of Metso, was appointed as the chair of the board of Metso Outotec and the chair of the board of Outotec, Matti Alahuhta, was appointed as the vice president of the board of Metso Outotec.

Metso Outotec

Metso Outotec started its operations in July 2020 and employed more than 15,000 people worldwide in more than 50 countries. It had six business areas: Aggregates, Minerals, Metals, Recycling, Services and Consumables. Pekka Vauramo started as the CEO of the company. The executive board commenced strategy work and it was promised that a joint budget would be formed before the end of the year. The company's focus was on providing technology and services for mining, aggregates, recycling and metal refining industries.The company stated that they are going to explore for synergy benefits in over 300 different operations. They were aiming annually for 150 million euros in turnover savings due to the benefits of synergy. The company had 190 offices of which 40 were going to be closed. When the co-operation negotiations were finished, the company announced that they were going to cut 254 jobs and that they were going to sell both of their recycling business lines. Over half of the company’s net sales came from the services and the biggest business area was minerals, which contributed 60 per cent of the net sales.By November 2021, apart from a few millions, the 120 million euros savings were achieved. The company had prepared for the effect of inflation by raising their prices monthly. For example, the logistic expenses had come up by 20 million euros compared to the previous year. In December, the company announced that they were going to sell their Metals recycling business unit to a subsidiary of a Swedish company Mimir. Previously they had already renounced the Waste recycling business area.In January 2022, Metso Outotec announced an organizational change in which Hydrometallurgy was moved from Metals business area to Minerals business area. Metals remained with business lines Smelting, Metals and Chemical Processing, Ferrous and Heat Transfer, as well as related aftermarket services. In March 2022, Metso Outotec announced that they had temporarily ceased all deliveries to Russia. Previous year, the net sales from Russia was 10% of the total net sales of the company. The company did not have its own production nor sourcing in Russia.