Sandvik is set to offload its exploration business to an Australian-owned company, Drillman, for an undisclosed price.
The deal includes exploration rigs, consumables and production stock, on top of trademarks and patents.
Drillman is a subsidiary of M Group, which provides equipment and technical support to the geotechnical, mineral exploration, horizontal, directional and upstream gas drilling sectors.
Sandvik chief executive and president Stefan Widing said the proposed sale was in line with the company’s aim to further improve its efficiency and profitability.
Sandvik Mining and Rock Technology president Henrik Ager added: “I believe we have found a good home for our exploration business in Drillman, who will support in the further development of its operations and performance.”
Sandvik’s exploration business had a revenue of around 450 million krona ($71 million) and a margin “slightly dilutive” to Sandvik Mining and Rock Technology last year.
The proposed transaction is expected to close in the fourth quarter of this year and subject to regulatory approvals.
“We are very excited to acquire Sandvik’s exploration business and look forward to collaborating throughout the transition,” M Group chief executive Harry Mostert said.
“The acquisition forms part of our long-term strategy to expand our international footprint and we are eager to introduce our passion for the mining and exploration business into the global market.”