On September 1, the Finnish government announced in a statement that it, along with Pontos, has agreed to acquire the 20.6% stake in Finland's Valmet Automotive currently held by CATL. As part of the agreement, the Finnish government will inject approximately €35 million into Valmet. Upon completion of the transaction, the Finnish government will hold a 79% stake in Valmet, while Pontos will own 21%.
Public information shows that Valmet was established in 1968 and is a significant automotive manufacturer in Finland. To date, it has produced approximately 1.8 million vehicles, collaborating with renowned automotive brands such as Mercedes-Benz, Saab, and Porsche.
CATL's investment in Valmet began in 2017. At that time, CATL acquired a 20.6% stake with an investment of €30 million, which was regarded as a key strategic move for its expansion into the European market.
Regarding the decision to divest its stake, the Finnish government stated that the slower-than-expected progress of electrification and the overall downturn in the European automotive market have led to a contraction in Valmet's orders in recent years, which were important factors prompting CATL's exit. At the same time, this divestment is also seen as a risk management measure. By reducing non-core assets, CATL can recoup funds to strengthen its battery research, development, and production.
Additionally, it is worth noting that Valmet is undergoing a significant strategic adjustment as part of this transaction. The company announced that, while the Finnish government becomes the majority shareholder, its subsidiary IONCOR, which focuses on battery systems, will become a subsidiary of Finnish Minerals Group.
Furthermore, the Finnish government will inject approximately €20 million in new capital into IONCOR. The Finnish government's comprehensive takeover of Valmet and its battery subsidiary highlights the determination of European countries to strengthen their local battery supply chains.
Edited by Cassie Li, lixiangying@mysteel.com
