Rapala VMC - Company Announcement

RAPALA STRENGTHENS STRATEGIC ALLIANCE WITH SHIMANO

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.