Weir Group joins £200m bid battle for Australian mining firm

By KRISTY DORSEY
Published on Saturday 11 February 2012 00:00

ENGINEERING giant Weir Group has announced it is planning a third acquisition in almost as many months after making a £200 million approach for Australian-listed mining specialist Ludowici.

The indicative offer pitches the Glasgow-based pump manufacturer against Danish engineering rival FLSmidth, which last month tabled an A$7.20 per share bid for Ludowici subject to certain conditions. Weir’s offer of A$7.92 per share represents a 10 per cent increase on that of FLSmidth.

It was uncertain yesterday whether FLSmidth will come back with a counter-bid. Under its agreement with Ludowici, it has priority as a buyer as long as it matches any higher offer.

Weir said its offer would be subject to checking the books at Ludowici, which is among the world’s leading providers of coal centrifuges and vibrating screens for the minerals industries. The Brisbane-based company employs 1,000 people globally, including 450 in Australia.

In addition to Australia, which accounts for about 65 per cent of revenues, Ludowici is also represented in other major mining regions such as South America, South Africa, India and China.

Keith Cochrane, chief executive of Weir, said Ludowici’s coal processing expertise would be a valuable addition to the group’s minerals division.

“The potential acquisition would extend Weir’s offering in minerals processing and expand our exposure to the attractive and fast growing coal sector where Weir is relatively unrepresented,” Cochrane said, adding that the deal was consistent with Weir’s 2010 acquisition of Linatex.

Weir paid £138m for Malaysian-based Linatex, which makes wear-resistant rubber parts for the mining industry.

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