Wärtsilä and Metso have signed a contract to form a joint venture combining Metso’s Heat & Power business (a business unit within Metso Power) and Wärtsilä’s Biopower business. The new joint venture will be one of Europe’s leading providers of medium- and small-scale power and heating plants, focusing on renewable fuel solutions. The closing of the transaction will require the relevant regulatory approvals, which are expected during the coming months.

Metso will own 60 percent and Wärtsilä 40 percent of the joint venture. It is estimated that in 2008 the consolidated annual pro forma net sales of the joint venture would be approximately EUR 130 million and the number of employees approximately 200.

Through this joint venture, Metso Power, a leading boiler technology company, and Wärtsilä Biopower, a leading modularized power plant supplier, will combine their resources and expertise in sustainable energy production.

The technology offerings of the two businesses – Wärtsilä’s grate and Metso’s fluidised bed combustion technologies – are complementary and enable solution offerings for a wide range of fuels in power plants.

“The general market outlook for the energy industry and especially for renewable energy production is promising. With Metso and Wärtsilä now joining forces, we will have enhanced capabilities to build and develop new technologies and solutions,” says Lennart Ohlsson, president of Metso Power.

“Fuel flexibility will be an important competitive edge in the future, and the joint venture will be well positioned to meet this challenge. We expect that there will be a high demand for the products, services and expertise of the combined entity,” says Christoph Vitzthum, group vice president, Wärtsilä Power Plants.

The demand for power plants capable of running on renewable fuels has increased as a result of high energy prices and increased global energy consumption. The European Union target to increase the share of energy based on renewables to 20 percent of primary energy by 2020 is a major factor behind this joint venture.

Metso’s Heat & Power business consists of Noviter Oy and VEÅ AB, both subsidiaries of Metso Power. Wärtsilä’s engine-based power plant business is not affected by the joint venture.