AGCO Corporation, a global manufacturer and distributor of agricultural machinery and precision ag technology, has announced a joint venture with ag-tech innovator Trimble. In this venture, AGCO will acquire an 85 percent stake in Trimble’s ag assets and technologies for a cash consideration of $2 billion and the contribution of JCA Technologies.
In all, Trimble said it expects approximately $3 billion in value from the transaction.
This partnership establishes a leading mixed-fleet precision ag platform on a global scale, becoming the exclusive provider of Trimble Ag’s comprehensive technology offerings. These technologies support the future development and distribution of next-generation ag technologies. Trimble Ag provides a range of user-friendly technologies compatible across various brands, equipment models, and farm types. Their hardware, software solutions, and cloud-based applications cover all aspects of the crop cycle, from land preparation to planting, seeding, and harvest.
Eric Hansotia, AGCO’s chairman, president, and chief executive officer, said, “This deal significantly enhances AGCO’s technology stack with disruptive technologies that cover every aspect of the crop cycle, which ultimately helps us better serve farmers no matter what brand they use.”
The company said that the joint venture complements and enhances AGCO’s existing precision ag portfolio, offering industry-leading solutions for over 10,000 equipment models throughout the crop cycle. By combining these two precision ag portfolios and leveraging multi-channel access across Trimble Ag, AGCO OEM & Aftermarket, other OEMs, and Precision Planting dealers, the joint venture is well-positioned to drive significant growth and provide next-generation technologies to farmers worldwide.
Hansotia added, “The exclusive access to Trimble Ag products, combined with AGCO’s existing precision ag offerings also accelerates AGCO’s growth ambitions around autonomy, precision spraying, connected farming, data management, and sustainability. All of these touchpoints will result in us being even more farmer-focused.”
Commercial synergies from direct access to AGCO’s global OEM, aftermarket, other OEM, retrofit channels, and anticipated cost synergies are expected to double the JV’s EBITDA within five years after closing.
Rob Painter, CEO of Trimble, noted, “Farmers today are looking for mixed fleet solutions across their tractors and implements to efficiently and sustainably feed the world. We believe a joint venture with AGCO, complemented by the successful mixed fleet approach they have developed with their Precision Planting business model, can help us better serve farmers and OEMs together.”
The transaction is anticipated to close in the first half of 2024, subject to regulatory approval and customary closing conditions.
Additionally, AGCO has announced a strategic review of its grain and protein business as part of its broader portfolio transformation, evaluating strategic options to maximize its potential in serving its customers effectively.
