Compass Lexecon advises in Global Valmet/Neles Merger

The transaction in the valves sector was cleared unconditionally in all relevant jurisdictions in March 2022.

In July 2021, Finnish engineering firm Valmet announced its intention to acquire 100% of the shares of Neles, challenging a bid from Swedish engineering firm Alfa Laval. Valmet is engaged in the development and provision of services and technologies for the pulp, paper and energy industries, while Neles is an international supplier of valve and valve automation technology and services for process industries. The Parties’ vertical relationship caused particular competition concerns.

Compass Lexecon assisted the Parties throughout the merger review process in their interactions with several national competition authorities, including Brazil, China, Finland, Austria and the U.S.

Compass Lexecon assessed vertical theories of harm in the valves market, showing that the merged entity would have no ability or incentive to foreclose its competitors. Alongside other quantitative and qualitative analyses, we conducted vertical arithmetic to analyze potential vertical foreclosure issues. Our analyses demonstrated that the valves market is characterized by several strong competitors that could exert a competitive constraint on the Parties post-merger, both in the upstream and downstream market. We also submitted a rebuttal report in Brazil, following a third-party complaint by a competitor.

The global Compass Lexecon team was led by John Davies and Pekka Sääskilahti in Europe and Elizabeth Wang and Bryan Keating in the U.S., and included Helder Vasconcelos, Cecilia Nardini, Sergey Khodjamirian, Jake Cheng, Valentina Bianchi Vimercati, Hendrik Schiermeyer, Zhou Zhong, Ram Smaran Suresh Kumar and Esa Immonen.

We worked closely with Kaarli Eichhorn, Henry de la Barre and Yizhe Zhang from Jones Day, Maria Wasastjerna, Toni Malminen and Mikko Huimala from Hannes Snellmann and Ami Paanajärvi, Hanna-Mari Immonen and Iida Lindfors from Roschier.

Compass Lexecon has provided economic expertise in some of the most high-profile multi-jurisdictional merger proceedings in the world. Our economists, based in the United States, Europe, Middle East, South America and Asia-Pacific, work seamlessly together to provide cohesive economic analysis and support to the multiple teams of internal and external legal advisors involved in global transactions. Over the last ten years, Compass Lexecon has advised in over 100 jurisdictions and our experts’ language capabilities extend our market coverage even further.