The sale forms part of Weir’s strategy to transform into a premium mining technology pure play
Caterpillar will acquire Weir Oil & Gas. (Credit: The Weir Group PLC)
Scottish engineering firm Weir Group has signed an agreement to divest its entire Oil & Gas division to US-based Caterpillar for $405m in cash.
Under the terms of the deal, Caterpillar will acquire Weir Oil & Gas, which employees approximately 2,000 people.
Weir Oil & Gas, which operates more than 40 manufacturing and services locations, produces a full line of pumps, flow iron, consumable parts, wellhead and pressure control products.
The acquisition is subject to review by various regulatory authorities as well as customary closing conditions. It is planned to be completed by the end of 2020.
Caterpillar Oil & Gas and Marine Division vice-president Joe Creed said: “This acquisition will expand our offerings to one of the broadest product lines in the well service industry.”
The acquisition of part of Caterpillar’s strategy to invest for long-term, profitable growth
The acquisition of Weir Oil & Gas forms part of Caterpillar’s strategy to invest for long-term, profitable growth through expanded offerings and services.
In a press statement, Caterpillar said: “Caterpillar is taking advantage of its strong balance sheet to complete this acquisition that supports the enterprise strategy.”
The sale forms part of Weir’s efforts to transform into a premium mining technology pure play. Through the sale, the company intends to strengthen its balance sheet to support investment in future growth opportunities.
Weir Group CEO Jon Stanton said: “We are pleased to have reached this agreement that delivers a great home for the Oil & Gas division and maximises value for our stakeholders.
“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.”
In 2018, Weir Group acquired Esco, a US-based provider of Ground Engaging Tools (GET) for surface mining, for $1.05bn.