Adds details on the deal
Oct 5 (Reuters) – Weir Group Plc WEIR.L said on Monday it had agreed to sell its oil and gas division to U.S. heavy equipment maker Caterpillar Inc CAT.N for $405 million in cash, as the engineering company focuses on its mining business.
The deal, which follows a collapse in global oil prices and a swathe of sectoral bankruptcies, will have a $70 million U.S. cash tax benefit for Weir, and the net proceeds from the deal will reduce the group’s leverage, the company said.
The transaction includes Weir’s North American and international oil and gas operations, comprising its Pressure Pumping and Pressure Control business units, and associated after-market spares among other things.
Weir Group Chief Executive Officer Jon Stanton called the move a major milestone in transforming the group into a focused, premium mining technology business.
The company said the deal, which is expected to close by the end of the year, would help it strengthen its balance sheet to enable future investments.
Weir said its oil and gas business had gross assets of 747.4 million pounds ($966.61 million) as of June 30.
($1 = 0.7732 pounds)
(Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by Vinay Dwivedi)
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