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Finnish Market Court approves joint venture plan between Uponor and KWH Group

Uponor Corporation     Stock exchange release     24 May 2013 15.00 EET

 

Finnish Market Court approves joint venture plan between Uponor and KWH Group


The Finnish Market Court has today announced its approval of the plan, between Uponor Corporation and KWH Group, to merge their infrastructure solutions businesses into a jointly owned enterprise, Uponor Infra Oy.

The Market Court’s approval of the merger is subject to the following conditions:

  • Uponor Infra Oy agrees to offer contract manufacturing of selected product ranges up to agreed volumes to other pipe manufacturers operating in the Finnish market
  • Uponor Infra Oy agrees to sell off seven specified extrusion lines.

Uponor and KWH Group are in agreement with the above conditions, which were included in the joint reply submitted to the Market Court in the spring. The Finnish Competition and Consumer Authority can still appeal against the Market Court’s verdict, to Finland’s High Administrative Court of Justice within a period of 30 days.

In September 2012, Uponor and KWH Group announced plans to establish a jointly-owned company comprising Uponor’s and KWH Group’s infrastructure solutions businesses. The new company, to be named Uponor Infra Oy, will be majority-owned by Uponor (55.3%) and will be consolidated within Uponor Corporation as the segment, Uponor Infrastructure Solutions. KWH Group will own the remaining 44.7% of the shares.

Uponor’s President and CEO Jyri Luomakoski made the following comments on the Market Court resolution: “We are excited about being able to begin implementing our plan, in which both Uponor and KWH Group have invested a great deal of effort and resources. I am sure this merger will enhance our leadership in the infrastructure segment with a wider customer base, a broader offering and an extended geographical reach. This will increase the confidence of our customers and the markets in which they operate, and will intensify our employees’ commitment to the segment.”

Peter Höglund, President & CEO of the KWH Group, notes the deal’s approval by the Market Court with great satisfaction: “The KWH Group regards a merger with Uponor as the best strategic way forward for the KWH Pipe division’s further development. The combined businesses will now have access to more potential customers, with broader product solutions and considerable synergy effects.”

The transaction, which is of great strategic importance to Uponor’s Infrastructure Solutions, is expected to yield annual integration benefits in the magnitude of €10 million, once the synergies are fully implemented.

The parties have agreed that Sebastian Bondestam, Executive Vice President for Uponor Infrastructure Solutions, will manage the integration process for the interim period, until the management of the new joint-venture company is officially announced.

Uponor and KWH Group will close the deal in the near future and plan for the new company to begin operating from 1 July onwards, once the legal arrangements have been finalised. Until then, the entities will continue separately, under the going concern assumption. Uponor expects there to be an integration period of several months, during which time the new setup and structure will be defined and communicated to key target groups. Between now and then, both companies will maintain their focus on their operations, in order to safeguard customer service.

Earlier announcements related to the case (available at http://investors.uponor.com/news-downloads/ir-news):

28 Feb. 2013:
The joint venture plan with Uponor and KWH Group will go to the Market Court
25 Feb. 2013:
The Finnish Competition and Consumer Authority proposes to the Market Court that the joint venture plan between Uponor and KWH Group be not approved
21 Sept. 2012:
Uponor and KWH Group announce a merger of their infrastructure businesses

 

Pictures and film footage available through the following links (available until 15 June 2013):

http://umib.uponor.com/?cart=2473-hkgdfbbcje&l=EN
http://umib.uponor.com/?cart=2474-biifblclme&l=EN

 

Further information from:

Uponor: Jyri Luomakoski, President and CEO,
tel. +358 20 129 2824, mobile +358 40 515 4498

Riitta Palomäki, CFO, tel. +358 20 129 2822

KWH:  Peter Höglund, President and CEO, KWH Group Ltd,
tel. +358 20 778 7100, mobile +358 40 860 7001

Jan-Erik Nordmyr, President and CEO, KWH Pipe Ltd
tel. +358 20 778 7571, mobile +358 40 860 7094
 

 

Uponor Corporation

Tarmo Anttila
Vice President, Communications
Tel. +358 20 129 2852

 

DISTRIBUTION:
NASDAQ OMX - Helsinki
Media
www.uponor.com

 

Uponor is a leading international provider of plumbing and indoor climate solutions for residential and commercial building markets across Europe and North America. In Northern Europe, Uponor is also a prominent supplier of infrastructure pipe systems. The Group employs approx. 3,000 persons, in 30 countries. In 2012, Uponor's net sales exceeded €810 million. Uponor Corporation is listed on NASDAQ OMX Helsinki in Finland. http://www.uponor.com.