Less than a month ago, I speculated in an article on Caterpillar (CAT) that the company could be a natural suitor for Weir Group’s (OTCPK:WEIGY) Oil & Gas business, and now we have the announcement of the deal. Caterpillar and Weir announced on the morning of October 5 that the two companies came to an agreement for the cash sale of the business to Caterpillar.
This looks like a win-win to me for both parties, though perhaps a more clear-cut win for Weir Group. Weir wanted out of the oil & gas market and this deal gives them a clean exit and the freedom to restructure as a pure-play on mining and aggregates. For Caterpillar, management has wanted to build up its oil/gas pumps business, and Weir will bring additional product and service leverage opportunities beyond that. The major “but” for Caterpillar is the timing and scale of an eventual recovery in North American onshore oil/gas drilling activity.
Read more here:
Caterpillar And Weir Strike A Deal For Weir's Oil & Gas Operations
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