Rapala VMC - Company Announcement

RAPALA ACQUIRES THE SUFIX BRAND AND CONCLUDES AN EXCLUSIVE SUPPLY AGREEMENT INCLUDING ALSO OEM FISHING LINES

Rapala VMC Corporation    STOCK EXCHANGE RELEASE
                                             June 11, 2008 3.45 pm


Acquisition of Sufix Brand and Conclusion of an Exclusive Supply
Agreement

Rapala VMC Corporation ("Rapala") and Yao I Co ltd ("Yao I"), one of
the leading manufacturers of fishing line in the world having its
offices in Changhua, Taiwan, and fishing line factories in Taiwan and
China, have decided to conclude an exclusive supply agreement for the
supply of fishing lines. In connection with this arrangement, Yao I
has agreed to sell its Sufix brand, including all intangible assets
relating to Sufix branded and other fishing line business (excluding
manufacturing related), to Rapala.

Sufix brand is very well known around the world already for more than
20 years. The largest market for Sufix is currently the USA but the
brand is well represented also in Europe, Asia and Oceania. As part
of the deal, Rapala will acquire the Sufix branded fishing line
inventory from Sufix North America, Inc.

According to the terms of the exclusive supply agreement, after an
interim period and under certain conditions, Rapala alone will be
selling fishing lines manufactured by Yao I and Yao I will be
manufacturing fishing line for Rapala only, including subcontracted
fishing lines for third party customers (OEM).

The amount of the total consideration for the transaction is not yet
available since it is determined after the results of the ongoing due
diligence process are available.

Yao I, established in 1973, is a family owned company manufacturing
fishing line and strings for rackets, garden trimmer lines, and other
industrial monofilament. Its net sales for 2007 were some USD 34
million (pro forma) and it employs some 600 people mainly in Taiwan
and China.

Rapala to Strongly Expand its Fishing Line Business

Rapala aims to expand its fishing line sales in the next few years to
some 25-40 MEUR and gain a significant market share of the global
fishing line business. In 2007, the fishing line sales of Rapala were
some 7 MEUR."Through this deal Rapala enters into the worldwide fishing line
category in a meaningful way. As a result of this deal, Yao I will
supply Rapala's global distribution network with a wide selection of
fishing lines including monofilament, braided and fluorocarbon lines.
While Yao I is strong in manufacturing and development of fishing
line Rapala is strong in global marketing and distribution.
Therefore, this will be a win-win concept creating an exceptionally
strong fishing line business for both companies. Rapala's target is
to gain a significant market share from the worldwide fishing line
business during the next few years", says Jorma Kasslin, CEO of
Rapala.
Completion of the Deal

This transaction is expected to be completed and closed in July 2008.
It will have an immaterial effect on Rapala's 2008 net sales and
profitability but it is expected to increase Rapala's net sales close
to 10 MEUR in 2009.

RAPALA VMC CORPORATION

Jorma Kasslin
Chief Executive Officer

For further information, please contact:

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
Lars Ollberg, Director of Sales for Accessories, tel. +358 9 7562
540

Distribution: Main Media and OMX Nordic Exchange in Helsinki

Rapala 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, Russia 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 242 million in 2007, employs more than 4
000 people in 30 countries.

Attachments:

Stock Exchange Release June 11, 2008