Pending shareholder approval, the Scotland-based company will sell its industrial pumps and valves business to focus on mining and oil and gas. As part of the move, Weir has bought the US mining equipment company ESCO for over $1.2 billion (€1 billion).
Weir announced the transaction 19 April, and expects it to be completed early Q3 of 2018. Unlike the sale of the Flow Control division, the purchase of ESCO is not subject to shareholder approval.
There is no fixed timeline for the sale, but the company says that it will focus on ‘maximising value for shareholders’ and that it is considering all options. Proceeds are to go towards reducing leverage and funding future investment in its streamlined portfolio. Weir does not expect to have those earnings before 2019.
The company says that the acquisition of ESCO and sale of the division will allow it to focus on its Minerals and Oil & Gas divisions.
“This reflects supportive long-term fundamentals for these end markets and Weir's core strengths in highly abrasive aftermarket-intensive applications that require comprehensive global support,” it said in statement.