A potential merger bid by Weir Group has been rejected by its rivals Metso Corporation.

The Glasgow-based firm had proposed an all-share merger, where Metso shareholders would own around 37% of the combined company. However, in a statement on Wednesday, the Metso board said it had "carefully evaluated" the proposal, but had reached a "unanimous conclusion", that the move would not be in the best interests of its shareholders.

It added: "The Metso Board remains extremely positive and confident in Metso's standalone growth and value creation prospects by pursuing its current strategy.

"As a consequence, the board has rejected Weir's proposal and sees no reason to commence discussions regarding a potential combination."

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The potential agreement was first announced last month by Metso, who are listed in Helsinki, and was reported to be worth more than £3.3bn.

In response to the decision, Weir Group said in a statement: "The proposal was structured to enable the shareholders of both Metso and Weir to share in the very significant value creation that would result from material cost synergies in addition to further revenue synergies expected to be generated through the combination.

"In keeping with the spirit of the merger proposal, Weir had proposed that the combined company would have a significant presence in, and a long term commitment to, Finland as well as the UK and would be listed in both Finland and the UK with full index inclusion in both countries, alongside shared management and board responsibilities.

"Weir continues to believe that there is a compelling strategic rationale for bringing the two companies together in a merger structure.

"The Board of Weir believes that it has made an attractive merger proposal and there is no certainty that it will revise the terms of its proposal. Further announcements will be made if and when appropriate."

(JP/MH)