Wärtsilä's Board of Directors proposes to the A...

Wärtsilä Corporation, Company Announcement, 28 February 2008 at 9.30
am EET

Wärtsilä's Board of Directors proposes to the Annual General Meeting
to be convened on 19 March 2008 that in addition to the dividend of
EUR 2.25 per share proposed on 4 February 2008, an extra dividend of
EUR 2.00 per share be paid on the 2007 financial period for a total
dividend of EUR 4.25 per share.

In addition, the Board of Directors proposes that the company's A and
B share series be combined. Following the measures taken to combine
the share series the Company would have only a single class of
shares. All shares would carry one (1) vote each and would have equal
rights. The combination of share series involves a directed free
share issue for holders of Series A shares. The free share issue is
directed in such a way that, disapplying the pre-emptive right of the
shareholders, holders of Series A shares would receive one (1) share
free of charge for each nine (9) Series A shares. In this way holders
of nine (9) Series A shares would hold ten (10) of the company's
shares following the measures taken to combine the share series
("exchange ratio").

Listed companies are increasingly switching to having just one share
series. Combining the two share series is expected increase interest
towards the Company's shares and to improve the liquidity. In
addition the arrangement clarifies of the ownership structure.

Shareholders representing more than half of the Company's A-shares
have in advance announced in writing that they support this proposal
and they have given their consent to the arrangement.

The Board has obtained a fairness opinion from UBS Limited and
according to the opinion the exchange ratio is fair from a financial
point of view to the Company's shareholders. The auditor of the
Company, KPMG Oy Ab, has given a statement confirming that the
grounds for not applying the pre-emptive rights of the shareholders
in the directed free share issue as per this proposal are in
accordance with the Finnish Companies Act.

The Board of Directors proposes also that the Articles of Association
be amended in their entirety.
Each holder of Series A shares as of the record date 26 March 2008
would have the right to receive the new shares.

The invitation to the Annual General Meeting to be convened on 19
March 2008 shall be published today in a separate stock exchange
release.


Wärtsilä Corporation

Ole Johansson
President & CEO

Further information: President & CEO Ole Johansson, tel. +358 (0)10
7095 601 and Executive Vice President & CFO Raimo Lind, tel. +358
(0)10 7095 640.


ATTACHMENTS WHICH YOU ARE ADVICED TO READ


Proposal of the Board of Directors for the distribution of profits
Proposal of the Board of Directors to combine the share series and
pertaining to the related directed free share issue and amendments to
the Articles of Association
UBS disclaimer

Proposal of the Board for distribution of an extra dividend

The parent company's distributable funds total 361,451,221.40 euros
taking into consideration the Board's previous proposal for a
dividend of 2.25 euros/share made on 4 February 2008. There are
95,969,561 shares with dividend rights.

In addition to the proposal made on 4 February 2008, the Board
proposes to the Annual General Meeting that the company's
distributable earnings be disposed in the following way:

EUR

An extra dividend of 2.00 per share be paid, making a  191,939,122.00
total of
To be retained in shareholders' equity                 169,512,099.40
Total                                                  361,451,221.40


No significant changes have taken place in the company's financial
position since the end of the financial year. The company's liquidity
is good and in the opinion of the Board of Directors the proposed
extra dividend will not put the company's solvency at risk.


Helsinki, 27 February 2008

Board of Directors


PROPOSAL OF THE BOARD OF DIRECTORS TO COMBINE THE SHARE SERIES AND
PERTAINING TO THE RELATED DIRECTED FREE SHARE ISSUE AND AMENDMENTS TO
THE ARTICLES OF ASSOCIATION

In accordance with the Articles of Association the Company's shares
belong to Series A or Series B, which differ in that Series A shares
carry ten (10) votes while Series B shares carry one (1) vote. The
total number of Series A shares is 23,579,587 and Series B shares
72,389,974. Both Series A and Series B shares are traded publicly on
the OMX Nordic Exchange Helsinki Main List.

The Board of Directors proposes to the Annual General Meeting that
the two share series be combined so that following the measures taken
to combine the share series the Company would have only a single
class of shares that is traded publicly and whose shares carry one
(1) vote each and have in all other ways equal  rights. The
combination of share series involves a directed free share issue for
holders of Series A shares and partial amendment to the Articles of
Association.

The condition for the adoption of the proposal of the Board of
Directors is that the Annual General Meeting has resolved to amend
the Articles of Association in accordance with Item 2 in the Summons
to the Shareholders' General Meeting in such a way that the Company's
shares no longer carry a nominal value. The following itemized
proposals of the Board of Directors form an entirety that requires
the adoption of all its individual items.

Shareholders representing more than half of the Company's A-shares
have in advance announced in writing that they support this proposal
and they have given their consent to the arrangement.

The Board of Directors proposes to the Annual General Meeting the
following measures to combine the share series:

Combination of share series

The Board of Directors proposes that the Company's share series be
combined without increasing share capital by removing the relevant
sections in the Articles of Association pertaining to the share
series as described below, wherein each Series A share would be
converted into a share corresponding to the current Series B share.
In connection with combining the share series, the Series A shares
that have been converted into shares corresponding to the current
Series B shares would be incorporated in the book-entry securities
system and are estimated to become traded publicly as of 27 March
2008. The record date for the combination of share series would be 26
March 2008. The combination of share series would not require any
actions by shareholders.

Directed free share issue

The Board of Directors proposes that, in connection with the
combination of share series, a free share issue be directed to
holders of Series A shares in such a way that, disapplying the
pre-emptive right of the shareholders, holders of Series A shares
would receive one (1) share free of charge for each nine (9) Series A
shares. Based on the combination of the share series and the directed
free share issue the ownership of nine (9) Series A shares changes to
be the ownership of ten (10) ordinary shares ("exchange ratio").


Each holder of Series A shares as of the record date 26 March 2008
would have the right to receive new shares.

The new shares would be distributed among holders of Series A shares
in proportion to ownership and recorded directly to the holder's
book-entry securities account on the basis of information on the
record date and in accordance with the regulations and procedures of
the book-entry securities system.

If the number of Series A shares held by the holder of Series A
shares is not divisible by nine (9), the remaining shares will be
given to Nordea Bank Finland Plc to sell for the account of the
holders of Series A shares whose number of Series A shares is not
divisible by nine (9), as specified in more detail by the Board of
Directors and in accordance with the agreement between the Company
and Nordea Bank Finland Plc. The directed free share issue would not
require any actions by shareholders.

A maximum of 2,619,954 shares would be released in directed free
share issue.

The new shares will carry full rights from the moment they are
registered. For the sake of clarity it should be noted that the new
shares do not convey the right to the dividend to be decided by the
Annual General Meeting on 19 March 2008.

The Company's Board of Directors is authorized to resolve about other
terms and practical aspects of the directed free share issue.

In considering the grounds for a directed free share issue, the Board
of Director has taken into consideration also the following factors:
that (i) listed companies in both Finland and internationally are
increasingly switching to the practice of having just one class of
shares, and combining the two share series is expected to improve the
trading turnover of the Company's shares when trading is focused on
one class of shares; (ii) the turnover of Series A shares has been
just 9% that of Series B shares over the past 12 months; (iii) the
combination of share series as proposed by the Board of Directors
would decrease the voting rights of previous Series A shares from
approximately 76.5% to approximately 26.6% and increase the voting
rights of previous Series B shares correspondingly from approximately
23.5% to approximately 73.4%; (iv) the premium that would be given to
holders of Series A shares in connection with the combination of
share series is customary  and reasonable; and (v) the dilution
effect of the proposed share issue on the ownership proportion for
holders of Series B shares would be approximately 2.7%, which can
also be considered customary and reasonable in connection with the
combining of the share series.

The combination of share series and the connected directed free share
issue would simplify and clarify the Company's ownership structure
and standardize the rights connected with the shares. This is
expected to increase interest in the Company's shares and lead to an
increase in the turnover of the Company's shares. In addition, the
clarification of the ownership structure is expected to improve the
opportunities to use the Company's shares for raising financing.

It is the view of the Board of Directors that combining share series
is in the interests of the Company and all its shareholders. The
Board of Directors considers that, taking into consideration the
above, there are exceptional financial grounds in terms of the
Company and taking into consideration the interests of all its
shareholders for a directed share issue in order to combine the share
series.

The Board of Directors believes that the combination of share series
and the connected directed free share issue would create benefits for
holders of Series B shares and for the Company that are equal to
those for holders of Series A shares through the directed free share
issue. It is the view of the Board of Directors that combining share
series and the connected directed free share issue can be considered
reasonable in terms of the overall benefit for the Company and all
its shareholders.

The Board has obtained a fairness opinion from UBS Limited and
according to the opinion the exchange ratio is fair from a financial
point of view to the Company's shareholders. The auditor of the
Company, KPMG Oy Ab, has given a statement confirming that the
grounds for not applying the pre-emptive rights of the shareholders
in the directed free share issue as per this proposal are in
accordance with the Finnish Companies Act.

Amendments to the Articles of Association

The Board of Directors proposes that the Annual General Meeting
resolve to remove the stipulations in the Articles of Association
concerning the different share series from Article 3 of the Articles
of Association in accordance with the changes to the Articles of
Association proposed in Item 2 in the Summons to the Shareholders'
General Meeting in such a way that Article 3 "The Shares" would read
as follows:

"The shares of the company are incorporated in the book-entry
securities system."

Helsinki, 27 February 2008

Board of Directors

UBS Disclaimer

In connection with the Transaction, UBS Limited ("UBS") rendered an
opinion to the Board of Directors of the Company, as of 27 February
2008, and based upon and subject to the factors, assumptions,
procedures, limitations and qualifications set forth in such opinion,
relating to the Exchange Ratio. In rendering its opinion, UBS assumed
and relied upon (without assuming any responsibility therefor), among
other things, at the direction of the Company, the assessments by the
Board of the Directors of the commercial benefits of the Transaction.
UBS's opinion did not address the relative merits of the Transaction
as compared to other business strategies or transactions that might
be available with respect to the Company's underlying business
decision to effect the Transaction. UBS's opinion is confidential and
was provided solely for the benefit of the Company's Boards of
Directors (acting in their capacity as such) in connection with the
Transaction and was not provided for the benefit of, and may not be
relied upon by, the shareholders of the Company or any other person.
UBS will receive a fee upon delivery of the opinion. In the past, UBS
and its predecessors have provided investment banking services to the
Company and received compensation for the rendering of such services.