Weir Group Backs Down From Negotiations with Metso After $6.13B Equity Bid Rejected
Scottish mine engineering specialists Weir Group has given up on its pursuit of Finnish rival Metso after it rejected an improved offer of $6.13 billion for around 40 percent of the proposed merger.
Metso claimed that the sweetened proposal still significantly undervalued their business and even came across an “opportunistic” approach, its board reinforcing the desire to remain an independent company.
In a public statement the Scottish company said: “Weir believes it made a compelling proposal but remains financially disciplined and therefore does not intend to pursue this opportunity further at this time.”
The failed marriage of the companies, which make equipment for the energy and mining, was an attempt by the Scottish firm to boost its activities in rock-crushing, area in which Metso is a world leader.
If the merger went ahead the combined value of the new company would have been more than $15 billion according to some estimates based on current market values for the individual businesses.
In rejecting the latest proposal, Metso attempted to reassure shareholders that it would work hard to add value away from this deal.
It said in a statement: “Metso is a leading process performance provider, with strong positions in the mining, construction, and oil & gas industries. All of its core businesses have significant opportunities for growth.
“Metso has successfully completed the demerger of Valmet Corporation and the Board believes that the company and its management team have significant opportunities to deliver substantial value to shareholders in its different end markets across mining, construction and automation.”
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.