The Boards of Directors of Rauma Corporation and Valmet Corporation have today approved a merger plan that will be presented to their respective shareholders' meetings for their approval. The new company will be a market leader on a worldwide basis in all of its main product groups as a supplier of machinery and processes for the forest products industry. "The new company is able to serve and develop the globalizing forest products industry efficiently in the future", says Mr. Juha Niemelä, President and CEO of UPM-Kymmene Corporation. According to Mr. Niemelä the solution is extremely good for Rauma Corporation and therefore for its biggest shareholder, UPM-Kymmene and its shareholders. UPM-Kymmene Corporation and the Finnish state, which is the largest single shareholder of Valmet, have entered into a mutual agreement in which they have agreed to contribute in the shareholders' meetings of Rauma and Valmet to the approval of the merger plan. In order to ascertain that the ownership base of the new company will remain as stable as possible during the implementation period of the merger, UPM-Kymmene Corporation and the Finnish state have agreed not to sell shares in Rauma, Valmet or the company created in the merger, Valmet-Rauma, prior to June 30, 2000. In addition, UPM-Kymmene Corporation and the Finnish state have agreed to inform each party in the event that either party plans to transfer more than 30 percent of the shares owned by such party in the relevant company prior to June 30, 2001.