Weir Group shares slip as it bolsters its presence in Asia

Shares in Weir Group slipped after the Scottish engineering giant revealed an £89 million swoop for an Asia-focused oil and gas technology firm.

The firm has moved to acquire KOP Surface Producers – a provider of advanced surface pressure control technologies – from Norwegian-listed Akastor ASA.

It is funding the deal through the issue of new ordinary shares equivalent to approximately 2% of Weir’s issued share capital.

The transaction is subject to the fulfilment of certain conditions but is expected to go through in the third quarter of the year.

Weir Group chief executive Jon Stanton said he was delighted to have reached a deal for the Singapore-based unit.

He said: “KOP is a great company with a strong management team that we have admired for some time.

“It is a natural fit for Weir and extends our range of wellhead and other pressure control solutions. KOP’s position in Asia also complements Weir’s leading presence in North America and the Middle East and means our group is in an even stronger position to benefit as oil and gas markets recover in the future.”

Akastor ASA chief executive Kristian Røkke said he was pleased with the value the sale of KOP had achieved.

“KOP has done an excellent job in recent years of improving operations and expanding its footprint while adapting to challenging market conditions,” he said.

“Weir is an ideal owner of KOP and is well positioned to take the company to the next level.”

In addition to the KOP deal, Weir also updated on recent trading.

It said order input trends in April and May were in line with expectations and its full-year guidance remained unchanged with, as previously indicated, the bulk of its profits expected in the second half.

Despite the upbeat tone, shares moved lower in early trading before closing down 1.95% at 1864 pence.