Weir initially announced its plans to divest in February, saying it wanted to focus on becoming a “premium mining technology firm”.

The Glasgow-headquartered company said the agreement with Caterpillar would be a “strong outcome for all stakeholders”.

Subject to shareholder approval, the deal should go through by the end of 2020.

The transaction includes more than 40 Weir oil and gas manufacturing and services locations and about 2,000 employees.

The division is understood to employ 50 people in north-east Scotland.

Weir chief executive Jon Stanton said: “We are pleased to have reached this agreement that delivers a great home for the oil and gas division and maximizes value for our stakeholders. “Alongside the previous sale of the Flow Control division and the acquisition of ESCO, it is a major milestone in transforming the group into a focused, premium mining technology business. “It means Weir is ideally positioned to benefit from long-term structural demographic trends and climate change actions which will increase demand for essential metals that must also be produced more sustainably and efficiently. “This will require the innovative engineering and close customer partnerships that define Weir, and it is why we are so excited about the future.”

Joe Creed, vice president of Caterpillar’s oil and gas and marine division, said: “Combining Weir Oil & Gas’s established pressure pumping and pressure control portfolio with Cat’s engines and transmissions enables us to create additional value for customers. “This acquisition will expand our offerings to one of the broadest product lines in the well service industry.” Weir’s shares were up 17.38% to £15.01 as of 11:30am in London.