Finland’s Metso spurned a merger approach from rival engineering firm Weir yesterday, leaving the British company casting around for other ways to boost its mining equipment business.
Weir said there was no certainty it would improve the proposed offer, which would have valued Metso at around a $5bn. Its plan ran into trouble as soon as it emerged on April 1, when the Finnish state said it opposed a takeover.
“The board of directors... has come to the unanimous conclusion that this proposal is not in the best interest of shareholders,” Metso said in a statement.
A deal would have helped Weir expand further into the crushing segment of the mining equipment industry, where Metso is a market leader.
Weir is keen to expand its mining arm after years of strong growth in its oil and gas division, which has seen profits triple since 2009. The company sits in a crowded mid-sized industrial sector which industry insiders say is ripe for consolidation in order to provide a wider range, and a greater scale, of equipment and services to cost-conscious clients.
Bankers have said a failure to merge with Metso could make Weir, already frequently the subject of takeover speculation, a target for big players such as General Electric or Honeywell.