The Finnish State on Monday announced that it will become the majority owner of the automotive contract manufacturer Valmet Automotive Plc, said the government and Finnish Minerals Group in separate press releases. Valmet Automotive will be transferred from Finnish Industry Investment Ltd to direct state ownership. At the same time, Valmet Automotives subsidiary, the battery manufacturer Ioncor, will become a subsidiary of Finnish Minerals Group, a wholly state-owned company specialised in developing the battery value chain. In addition to the State, Ioncors investors will be Pontos Group and Varma Mutual Pension Insurance Company. Around EUR 120 million in state capital will be used for the financing arrangement. The State and Pontos will purchase the 20.6 per cent stake in Valmet Automotive currently owned by China-based Contemporary Amperex Technology Limited. The parties have agreed that the purchase price will not be made public. As part of the arrangement, the State will invest around EUR 35 million in new capital in Valmet Automotive. Once the financing arrangement is complete, the State will own 79 per cent of Valmet Automotives shares, while Pontos will own 21 per cent. As part of the same arrangement, the State, together with Varma and Pontos, will purchase Valmet Automotives shares in its subsidiary Ioncor. The State will invest EUR 20 million in new capital in Ioncor. As a result of the arrangement, Ioncors shareholders will be Finnish Minerals Group (70 per cent), Varma (16 per cent) and Pontos (14 per cent). The downturn in the European automobile industry has caused Valmet Automotives order volumes to decrease in recent years. Ioncor has been systematically developing its product development and assembly operations in a market situation made challenging by the slower-than-predicted pace of electrification. In line with its strategy, Valmet Automotive is expanding its operations to new industrial sectors such as contract manufacturing for the defence industry. The focus of Ioncors new strategy, for its part, is on expanding its operations to heavy-duty vehicles and machinery. “With this financing arrangement, our goal is to ensure that special expertise in industrial contract manufacturing remains in Uusikaupunki and Salo. The State also sees promising opportunities to harness Valmet Automotives expertise to meet the growing needs of the defence industry,” said Minister of Economic Affairs Sakari Puisto. “The State as an owner considers Valmet Automotive a company of national significance and aims to increase the companys shareholder value over the long term in line with its new strategy. Transferring Ioncor to the majority ownership of Finnish Minerals Group further strengthens our goal of expanding business around the battery value chain in Finland,” said Minister Joakim Strand, who is responsible for ownership steering. The arrangement is based on a decision by the Ministerial Committee on Economic Policy. “FMGs strategic objective is to develop a responsible battery value chain in Finland and to drive the creation of a new industry and expertise in the country. IONCOR fits perfectly with our special mission and strategy, as battery engineering and battery system manufacturing are an essential addition to our portfolio downstream in the domestic battery value chain,” said Matti Hietanen, Chief Executive Officer of Finnish Minerals Group.