HELSINKI (Reuters) - Scottish engineering company Weir Group is in talks to take over Finnish rival Metso for more than 4 billion euros (3.3 billion pounds) as it looks to expand its industrial pumps and valves market, the Times reported on Tuesday.
The newspaper reported that Weir Group, which caters to mining and oil and gas industries globally, may pay as much as 30 euros a share for Metso, and that it aims to move forward with the talks within a month.
"They are talking a merger and have been for some time," an unnamed source told the newspaper. "There is no formal offer thus far, but they have been talking informally for a couple of months."
Metso and Weir Group declined to comment.
Earlier this month Metso spun off its paper machine business Valmet, basically halving the company and making it look like a more attractive acquisition target, analysts said.
Juha Kinnunen from Inderes Equity Research noted that the Finnish state, which owns 11 percent of Metso shares, could block any deal.
"I think the deal would have to be some kind of a merger, not a straight-forward acquisition by the Weir Group. Metso should be given some independence, and maybe the Finnish state would hang on to a stake in the new company," the analyst said.
Kinnunen also noted that buying Metso would be a big step for Weir group which has a market value of 5.4 billion pounds, compared with Metso's 3.6 billion euros.
"The two could have quite good synergies. They could expand their offering to same customers."
Metso's shareholders also include the Swedish activist fund Cevian Capital, whose co-founder Christer Gardell sits in Metso's board. Gardell was among the first investors to promote Metso's split-up already in 2005.
Reporting by Jussi Rosendahl in Helsinki; and Aashika Jain in Bangalore; Editing by Sophie Walker