City deal bonanza gathers pace as US giant Caterpillar snaps up Weir oil and gas biz for £314 million

Weir says its equipment can help miners cut their emissions, as demanded by protest groups like Extinction Rebellion

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5 October 2020

The deal bonanza that has swept through the City since the Covid-19 crisis today saw another major company sold as pumps engineer Weir offloaded its oil and gas division to US giant Caterpillar for £314 million.

Companies have been selling businesses, or preparing them for sale, in droves as the pandemic forces them to rethink their business models and look at ways to boost their cashflow.

In Weir's case, it had signalled even before coronavirus struck that it was seeking to raise money from its huge oil and gas division as part of a restructuring to focus entirely on servicing mining companies.

The move is partly due to concerns about the world's move away from polluting energy sources as countries aim to become carbon neutral. Weir also claims its technology helps mining companies deal with the pressure on them to reduce their carbon footprint by helping extract minerals more efficiently.

The sale to Caterpillar - following the disposal of another business known as the flow control division - will add to Weir's firepower to invest more in serving its mining clients, the group said.

Chief executive Jon Stanton described the deal as "a major milestone in transforming the group into a focused, premium mining technology business."

Weir began the transition to focus on this side of its operations in 2016 as it saw the potential for growth as miners saw the grades of ores they are digging up has declined, requiring better technology to obtain the minerals, plus the sector's increasingly tough emissions targets.

Weir, founded in 1871, is one of the oldest companies on the London Stock Exchange, having listed shares there in 1946.

UBS and Goldman Sachs advised Weir on the transaction.

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City deal bonanza gathers pace as US giant Caterpillar snaps up Weir oil and gas biz for £314 million

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