Weir confirms reports of possible merger with Metso

1st Apr 2014 11:11

Engineering group Weir has confirmed reports that it has proposed a merger with Finnish rival Metso. The Times reported on Tuesday that Weir was on the verge of a blockbuster $8.5bn deal with the Nordic firm, which like its Scottish rival, manufactures industrial pumps and valves for the oil and gas markets. "Weir confirms that it has made an indicative all share merger proposal to the board of Metso," the company said in a statement."The board of Weir believes that there is a strong strategic rationale for bringing the two companies together which would offer the opportunity for significant efficiencies and synergies, creating significant value for all shareholders. Weir envisages that the merged entity would be listed on both the London and Helsinki Stock Exchanges."It is understood that Weir could be prepared to pay as much as €30 per share for the company, giving it a market value of over €4bn (£3.3bn). Weir declined to detail the value of the offer, which will be subject to shareholder approval."Shareholders are advised that there can be no certainty that the merger proposal will lead to any agreement, or as to the timing or terms of any such agreement and there can be no assurance that, even if reached, any such agreement would lead to a transaction," the group said.Shares of Weir fell 2.60% to 2,470p at 11:11 on Tuesday.RD