AGCO acquires 85 per cent of Trimble for $2 billion in move to enhance brand offerings

American-based AGCO Corporation has entered into a $2 billion joint venture with Trimble which has resulted in an 85 per cent acquisition of its portfolio of agricultural assets and technologies.

The heads of both companies signed off on the landmark transaction in September, which elevates AGCO to “the premier mixed-fleet Precision Ag business in the world,” according to chair, president and chief executive Eric Hansotia.

AGCO designs, manufactures and distributes agricultural machinery and precision ag technology from brands including Fendt, GSI, Massey Ferguson, Precision Planting and Valtra.

Mr Hansotia said the deal “significantly enhances AGCO’s technology stack” with disruptive technologies that cover every aspect of the crop cycle that supports more than 10,000 equipment models.

“By combining the two Precision Ag portfolios and leveraging multi-channel access across Trimble Ag the joint venture will be positioned to drive outsized growth and better provide next-generation technologies to even more farmers around the world,” he said.

“The exclusive access to Trimble Ag products, combined with AGCO’s existing Precision Ag offerings also accelerates our growth ambitions in regards to autonomy, precision spraying, connected farming, data management and sustainability.

“All of these touchpoints will result in us being even more farmer focused.”

Trimble chief executive Rob Painter said farmers were looking for mixed fleet solutions across their tractors and the implements that they use to most efficiently and sustainably feed the world.

“We believe a joint venture with AGCO, complemented by the successful mixed fleet approach that they have developed with their Precision Planting business model, can help us better serve farmers and other equipment manufacturers together,” Mr Painter said.

Mr Hansotia said the transaction was not subject to a financing condition after AGCO secured $2b in fully committed bridge financing from Morgan Stanley Senior Funding.

The purchase price is expected to be funded by a combination of existing liquidity, free cash flow generation and new debt.

AGCO has also announced that its grain and protein business would be placed under strategic review as part of its broader portfolio transformation.