Caterpillar (NYSE: CAT) today announced an agreement to acquire the oil and gas business of The Weir Group (OTC:WEGRY), a Scotland-based engineering solutions company. No, Caterpillar won't be drilling or transporting petroleum-based fuels and natural gas. Instead, it'll be expanding its existing suite of products that serve the needs of oil and gas companies. Weir Group's oil and gas division manufactures products like valves, pumps, pressure controls, and consumable parts that primarily serve the upstream oil market, such as exploration, drilling, and production of oil wells. Image source: Getty Images. After the acquisition, Weir's oil and gas division will become part of Caterpillar's energy and transportation (E&T) segment, which manufactures several products for diverse industries, including reciprocating engines and turbines for the oil and gas business. The acquisition should add substantial value to Caterpillar's oil and gas portfolio. "This acquisition will expand our offerings to one of the broadest product lines in the well service industry," said Joe Creed, vice president for Caterpillar's oil, gas and marine division. Oil and gas was the largest contributor to Caterpillar's second-largest segment, E&T, last year. In 2019, E&T generated revenue of $22.1 billion, nearly 24% of which came from oil and gas products and services. Data source: Caterpillar financials. Chart by author. Caterpillar will pay $405 million in cash for Weir's oil and gas business, which generated revenue of 612 million pounds ($791 million) in 2019. Caterpillar is flush with cash, listing cash and short-term investments worth nearly $8.8 billion as of June 30, 2020. For The Weir Group, the sale of its oil and gas division is in line with management's recent decision to shrink the company into a mining technology pure play. The oil and gas business includes more than 40 manufacturing facilities with nearly 2,000 employees, all of which will go to Caterpillar after the acquisition. 10 stocks we like better than CaterpillarWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Caterpillar wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of September 24, 2020 Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source