Officials at Metso have rejected a proposed merger by the Weir Group amid concerns of slowed growth; Weir, however, cited a “compelling rationale” and may revise its offer. The agreement, valuing Metso at $5 billion, would have allowed both companies an enhanced global network, generating synergies beyond $415 million, said observers. Weir, under the deal, would have allowed Metso shareholders a 37% stake of the combined entity.
Weir has been keen on expanding into mining equipment since its oil and gas profits tripled since 2009, according to analysts; it remains in a mid-sized sector ripe for consolidation, they added.
After spinning off its paper-machines unit into Valmet, Metso has been focused on cost reductions as miners worldwide suspend investments. To this end, Metso is seeking cost saving implementations in 2014, with 50% targeting goods and services.