Weir Group confirms merger bid with Finnish firm Metso

Both companies make industrial pumps and valves for the oil, gas and mining sectors

Engineering giant Weir Group has confirmed it has proposed a possible merger with a Finnish rival.

The proposed deal to take over Helsinki-listed Metso Corporation is reported to be worth more than £3.3bn.

The Finnish engineering firm said talks had not yet started with the Glasgow-based group but it was considering the proposal.

Both companies produce industrial pumps and valves for global oil, gas and mining operations.

They confirmed the merger move following a report in the Times newspaper.

In a statement, Weir said: "The Weir Group Plc notes the recent press speculation concerning a possible transaction involving Weir and Metso Corporation and the subsequent statement from Metso.

"Weir confirms that it has made an indicative all share merger proposal to the board of Metso."

It added: "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.

"Weir will make a further announcement as appropriate in due course."

Metso said it had recently received an unsolicited approach by Weir "with a proposal for commencing discussions concerning a potential combination of the two companies".

It added: "Metso occasionally receives these types of proposals and, in case the board of directors of Metso considers them serious, evaluates such proposals.

"Contrary to market rumours, Metso is currently not and has not been engaged in discussions with Weir although it is in the process of considering Weir's proposal."

One obstacle to the merger is the opposition of Finnish state investment fund, Solidium, which owns 11% of Metso. It has rejected a takeover, saying Metso had a bright future as an independent company.

Solidium managing director, Kari Jarvinen, said: "I don't think this is the right time to sell Metso to Weir Group, or to sell it to anyone".