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  • Proposed sale of Weir Oil & Gas to Caterpillar Inc.
    édité le 06/10/2020

Proposed sale of Weir Oil & Gas to Caterpillar Inc.
The Weir Group PLC (“Weir” or “the Group”) is pleased to announce that it has entered into an agreement for the all-cash sale of its entire Oil & Gas division to Caterpillar Inc. for an Enterprise Value of US$405m (£314m)1, subject to customary working capital and debt-like adjustments at closing (the “Transaction”).

This follows the announcement in February 2020 that Weir would seek to maximise value from its Oil & Gas division as it continued its strategic transformation into a premium mining technology pure play.

Delivering transformation of Weir into a premium mining technology pure play

- Focused on attractive markets underpinned by global demographic trends, the transition to a low carbon society and adoption of new technologies in the mining industry
- Differentiated aftermarket, service and technology offering with proven earnings stability and strong cash generation through the cycle
- Strategic intent to build on leading mission-critical positions in the mining supply chain from extraction to concentration and tailings management
- Strengthened balance sheet to provide enhanced flexibility to invest in future growth opportunities

Transaction highlights: A strong outcome for all stakeholders

- Agreement to sell Oil & Gas division to Caterpillar Inc. for an Enterprise Value of US$405m (£314m)1
- Net proceeds to reduce the Group’s leverage; pro forma Net Debt/EBITDA at 30 June 2020 of 1.9x
- Transaction facilitates a $70m US cash tax benefit for Weir to be realised over the medium term
- Transaction subject to Weir shareholder approval; Class 1 Circular to be published in due course
- Completion expected by the end of 2020, assuming normal regulatory clearances

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. This will require the innovative engineering and close customer partnerships that define Weir, and it is why we are so excited about the future.”

Joe Creed, Vice President of Caterpillar’s Oil & Gas and Marine division 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.”

As a Class 1 Transaction the sale is conditional upon the approval of Weir shareholders with a Circular to be posted in due course, including a timetable for a General Meeting. The Oil & Gas division will now be classified as held for sale and will be reported in discontinued operations.

About the Weir Group

Founded in 1871, The Weir Group PLC is based in Glasgow, Scotland and is one of the world’s leading engineering businesses. Weir designs, manufactures and services innovative solutions which make our minerals, oil and gas, power and other process industry customers more efficient. This is recognised in the global leadership positions we have developed in our core markets. The Group aims to be a partner of choice to our customers with a worldwide network of around 200 manufacturing and service facilities. Weir has a presence in more than 70 countries, with over 14,000 people around the world working in three divisions: Minerals, Oil & Gas and Flow Control.

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