Caterpillar to acquire Weir's oil & gas division for $405m

Scottish engineering firm Weir Group has announced the signing of an agreement for the sale of its entire oil and gas division to US-based company Caterpillar Inc. for a reported $405 million (€344.6 million).

Weir first announced its intention to divest itself of its oil and gas business in February this year, saying it would seek to maximise value the sale as it would pivot to focussing exclusively on mining technology.

With remote operations and automation becoming increasingly popular, mining technology is a rapidly growing sector. This is also paired with companies looking to take advantage of the transition to a low carbon society by mining in increasingly environmentally friendly ways.

Jon Stanton, Weir Group Chief Executive Officer 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.

"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."

Caterpillar’s Oil & Gas and Marine Division vice-president Joe Creed 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 still subject to approval by Weir shareholders and is expected to be completed by the end of 2020.

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