Helsinki, Finland, Oct 11, 2007 - (Hugin via Asia Business News) - STOCK EXCHANGE RELEASE

October 11, 2007

Distribution Joint Venture for Russia and Ukraine

Rapala VMC Corporation ("Rapala") and Shimano Inc. ("Shimano"), one of the leading manufacturers of rods and reels worldwide, have decided to strengthen their distribution alliance in Russia and Ukraine by establishing a 50/50 joint venture company in Finland, controlled by Rapala. This joint venture company, Rapala Shimano East Europe Oy, will acquire existing Rapala distribution companies in both of these countries. As a result of the new joint venture, these distribution companies will start to distribute, in addition to their current product offering, Shimano reels, rods and other Shimano fishing tackle products on exclusive basis. The distribution company in Russia will also start to distribute Shimano bicycle parts.

"This is a historic and very important new step in the development of our distribution alliance, which will be a win-win concept for both parties and create a strong fishing tackle distributor in East Europe", says Jorma Kasslin, CEO of Rapala. "We are happy to extend our distribution alliance and to join forces with Rapala in East Europe, which is the fastest growing market area in fishing tackle and sporting goods", say Marc van Rooy, Managing Director of Shimano Europe Holding B.V. and Pierangelo Zanetta, Managing Director of Shimano Europe Fishing Holding B.V.

This transaction is expected to be completed and closed by year-end and it will create a capital gain of some 4.8 MEUR for Rapala. It will have next to none effect on 2007 net sales but it is expected to increase Rapala's net sales more than 10 MEUR in 2008.

Already before this transaction, Rapala distributes Shimano rods and reels and other Shimano branded products in South Africa and 20 countries in Europe. Shimano distributes Rapala branded products in 4 countries in Europe.

Rapala to Issue 889 680 shares to Shimano for 5 MEUR

Rapala Board of Directors has, based on the authorization of the shareholders' meeting held on April 4, 2007, decided to issue in deviation of the shareholders' priority 889 680 new shares, representing a 2.3% shareholding in Rapala, to Shimano (Singapore) Pte. Ltd. The share issue is part of the above mentioned arrangement of the distribution cooperation of Rapala and Shimano in East Europe. The funds generated through the share issue are intended to be used to strengthen the sales and marketing of Rapala's and Shimano's products in Europe.

The subscription price per share is EUR 5.62.

The subscription price is the weighted average price of the shares in Rapala from June 27 to September 27 on the OMX Nordic Exchange (Helsinki Stock Exchange). These new shares will not give right to dividend paid from financial year 2007. Shimano (Singapore) Pte. Ltd. has agreed to subscribe the above new shares, and there is a lock-up period of 12 months.

The total number of outstanding shares after the issue of new shares is 39 468 449. EUR 80 071.20 of the subscription price will be recorded in the share capital of Rapala, and the share capital after the issue of new shares will be EUR 3 552 160.41. The trading of the new shares is expected to commence at the end of October.

"This share issue is part of the arrangement where Rapala and Shimano strengthen their long-term distribution cooperation and it will support Rapala in exploiting the quickly increasing fishing tackle business in Eastern Europe. Shimano's product range compliments Rapala's product offering very well. Together we are stronger", says Emmanuel Viellard, Chairman of Rapala Board of Directors.

The new shares shall be subscribed for by paying their subscription price on 12 October 2007 at the latest and the new share are expected to be registered approximately within the next two weeks.

RAPALA VMC CORPORATION

Jorma Kasslin Chief Executive Officer

For further information:

Jorma Kasslin, President and Chief Executive Officer, tel. +358 9 7562 540 Jouni Grönroos, Chief Financial Officer, tel. +358 9 7562 540 Olli Aho, Company Counsel, tel. +358 9 7562 540

Distribution:

Main Media Helsinki Stock Exchange

Rapala VMC Corporation is a leading fishing tackle company and the global market leader in the fishing lures, treble hooks and fishing related knives and tools. The Group also has a strong global position in other fishing categories. The Group has its own distribution companies in all the main markets and the largest distribution network in the industry. The main manufacturing facilities are located in Finland, France, Estonia and China. The Group brand portfolio includes the leading brand in the industry, Rapala, and other global brands like VMC, Storm, Blue Fox, Luhr Jensen, Williamson and Marttiini. The Group, with net sales of EUR 227 million in 2006, employs more than 4 000 people in 29 countries.

Copyright © Hugin ASA 2007. All rights reserved.

Rapala VMC Oyj

http://www.rapala.com/

ISIN: FI0009007355

Stock Identifier: XHEL.RAP1V

ABN Newswire
ABN Newswire This Page Viewed:  (Since Published: 3)