The Weir Group has announced that it has entered into an agreement for the cash sale of its entire Oil & Gas division to Caterpillar for a value of US$405 million subject to customary working capital and debt-like adjustments.
Scottish-based Weir Group announced earlier this year that it was looking to sell the Oil & Gas division as it wanted to solely focus on mining technology.
Mining technology is a growing sector, with remote operation and automation proving popular. This is coupled with companies look to take advantage of the transition to becoming a low carbon society by mining in increasingly environmentally friendly ways.
Jon Stanton, Weir Group chief executive officer said, “Alongside the previous sale of the Flow Control division and the acquisition of ESCO, it is a major milestone in transforming the Group into a focused, premium mining technology business.
“It means Weir is ideally positioned to benefit from long-term structural demographic trends and climate change actions which will increase demand for essential metals that must also be produced more sustainably and efficiently. This will require the innovative engineering and close customer partnerships that define Weir, and it is why we are so excited about the future.”
Joe Creed, vice president of Caterpillar’s Oil & Gas and Marine division said, “Combining Weir Oil & Gas’s established pressure pumping and pressure control portfolio with Cat’s engines and transmissions enables us to create additional value for customers. This acquisition will expand our offerings to one of the broadest product lines in the well service industry.”
The deal is subject to Weir shareholder approval, with completion expected by the end of 2020.
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