AGCO Corporation has entered into a joint venture (JV) with Trimble, where AGCO will acquire an 85 percent interest in Trimble’s portfolio of agriculture assets and technologies for cash consideration of USD$2 billion and the contribution of JCA Technologies.
The JV creates a mixed-fleet precision agriculture platform that will be the exclusive provider of Trimble Ag’s technology offering, supporting the future development and distribution of next-generation ag technologies. Trimble Ag offers a wide variety of user-friendly technologies compatible across brands, equipment models and farm types. Its hardware, software solutions and cloud-based applications span all aspects of the crop cycle, from land preparation to planting and seeding to harvest.
“This landmark transaction creates a JV that becomes the premier mixed-fleet precision ag business in the world and accelerates AGCO’s strategic transformation,” said Eric Hansotia, AGCO’s chairman, president and chief executive officer. “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 JV will complement and enhance AGCO’s existing precision ag portfolio to deliver more industry leading solutions across the crop cycle while supporting over 10,000 equipment models. 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 JV will be positioned to drive outsized growth and better provide next-generation technologies to even more farmers around the world.
Commercial synergies resulting from direct access to AGCO’s global OEM, aftermarket, other OEM, and retrofit channels, in addition to modest run-rate cost synergies are expected to approximately double the JV’s EBITDA by year five post closing.
“Farmers today are looking for mixed fleet solutions across their tractors and the implements that they use to most efficiently and sustainably feed the world,” said Rob Painter, CEO of Trimble. “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 OEMs together.”
Closing is expected in the first half of 2024, subject to the satisfaction of regulatory approval and customary closing conditions.