The process agreement would see FLSmidth buy all of Ludowici’s shares at $7.20 per share, effectively acquiring the company for $267 million.
Ludowici is known for its coal centrifuges, vibrating screens, and wear resistant products for the mining industry.
Under the agreement, Ludowici has granted FLSmidth access to perform due diligence investigations.
The two companies have also agreed to negotiate the terms of a detailed scheme implementation agreement.
Ludowici’s board reportedly unanimously endorsed the proposal, subject to there being no superior offer.
There are only minimal conditions to the proposal.
FLSmidth stated that it has undertaken the acquisition in its bid to become a market leader in every minerals processing sector, with the focus heavily on coal, copper, and iron ore.
"The acquisition of Ludowici will allow FLSmidth to complete its coal processing flow sheet and improve its copper and iron ore offerings with leading technologies and brands," the company announced in a statement.
FLSmidth’s CEO Jorgen Huno went on to state that "FLSmidth is proud to have been given this opportunity to continue Ludowici’s 154 year history of providing minerals technology to its customers.
"What GL&V Process was to FLSmidth in copper, Ludowici would be for FLSmidth in coal. Coal is equal in size to all other minerals segments combined in terms of materials handled, and with the addition of Ludowici’s products we would be able to offer coal customers a unique one source solution".
The company expects to carry out due diligence and execute the scheme implementation agreement within seven weeks, with the scheme being considered by Ludowici’s board in May.