- Fortescue Metals signs agreement to acquire 100% of Williams Advanced Engineering Limited (WAE) from EMK Capital and Williams Grand Prix Engineering Limited for roughly US$223 million.
- The transaction is likely to be completed by the end of March 2022.
- FMG shares were trading 1.194% lower at AU$20.690 per share on the ASX as of 11:06 AM AEDT.
In yet another step aimed at realising its global green energy dream, ASX-listed iron ore mining giant Fortescue Metals Group Ltd (ASX:FMG) has forked out millions to lay its hands on battery technology. FMG on Monday informed that it has entered into a share sale and purchase agreement to acquire 100% of Williams Advanced Engineering Limited (WAE) from EMK Capital and Williams Grand Prix Engineering Limited for roughly US$223 million. The transaction will likely be completed by the end of March 2022, subject to the fulfilment of customary conditions precedent, including approval from UK foreign investment.
The announcement revealed that WAE will be integrated into Fortescue's diversified resources and green energy business and will be managed through Fortescue Future Industries (FFI). FFI is Fortescue's green energy and green technology division.
The acquisition holds significance as it will enable Fortescue to hasten decarbonisation of its mining operations as WAE provides critical technology and expertise in high-performance battery systems and electrification.
FMG and WAE have worked closely since early 2021 to design and build a prototype battery system to power an electric mining haul truck, an important step towards decarbonising Fortescue's mining haul fleet.
FMG further said that they will jointly develop battery electric solutions for Fortescue’s rail, mobile haul fleet and other heavy mining equipment, to rapidly reduce diesel usage as part of its plan to achieve the decarbonisation of Fortescue’s mining operations by 2030.
Also, Fortescue and WAE will work together to grow the latter’s green technology and engineering business. One of the first major projects to be developed jointly by the two companies would be a battery electric train concept, FMG said adding that they will announce further details on this later this year.
“Today’s announcement builds on our commitment to remove fossil fuel powered machinery from our operations and to replace it with zero carbon emission technology, powered by FFI green electricity, green hydrogen and green ammonia,” said Dr Andrew Forrest AO, Founder and Chairman, Fortescue.
How will the acquisition be funded?
The company will use its cash balance to fund the acquisition. The transaction amount is payable on the completion of the deal, subject to customary working capital adjustments.
This deal will surely boost FMG’s efforts to reduce carbon emission besides helping WAE to grow its existing business. Fortescue is planning to set up an advisory board to guide and empower WAE to achieve its targets. Fortescue’s lead independent director and deputy chairman Mark Barnaba AM will serve on the Advisory Board, the company mentioned.