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(Sharecast News) - Weir said on Friday that it has agreed to buy the remaining 50% share of its Chile-based joint venture ESEL for a sterling equivalent purchase price of £56m.
It said the deal will strengthen its direct market channels and manufacturing capabilities in South America and accelerate the long-term market growth opportunity for Weir in the LATAM region.
Established in 2007, ESEL is a joint venture between Weir's ESCO division and Elecmetal, a global metallurgical company headquartered in Chile, created to distribute ground engaging tools for the South American mining industry.
Weir said the acquisition enables the group to transition to a direct-to-customer model "in this important mining market with strong structural drivers".
Chief executive Jon Stanton said: "We are delighted to have reached this agreement to acquire the remaining share of our ESEL joint venture in Chile following a long and successful partnership with Elecmetal.
"This strategic move strengthens our ability to serve customers across South America, expands our foundry capacity in the region and with our world-class engineering capabilities, will enable further optimisation of our manufacturing footprint globally.
"The transaction will also accelerate our go-direct strategy in Chile, mirroring the success we've achieved in other ESCO geographies. With full operational control, we will enhance our Weir network to grow market share and capitalise on Chile's long-term structural tailwinds in mining, particularly in copper."
The deal is expected to complete in the first quarter of next year. Once it does, the business will be integrated into the South American region within Weir's ESCO division.
