AGCO to acquire majority share of Trimble Ag

AGCO Corp. announced it has entered into a joint venture (JV) with Trimble, through which it will acquire an 85% interest in Trimble’s ag assets and technologies portfolio for cash consideration of $2.0 billion and the contribution of JCA Technologies. Closing is expected in the first half of 2024, subject to the satisfaction of regulatory approval and customary closing conditions.

Trimble President & CEO Rob Painter (left) with AGCO Chairman, President & CEO Eric Hansotia. (Photo: AGCO)

The Trimble Ag portfolio includes a variety of user-friendly technologies compatible across brands, equipment models and farm types, AGCO noted. Its hardware, software solutions and cloud-based applications span all aspects of the crop cycle, from land preparation to planting and seeding to harvest.

The JV will serve as the exclusive provider of Trimble Ag’s technology offering, supporting future development and distribution of next-generation ag technologies. Eric Hansotia, AGCO chairman, president and CEO, called it a “landmark transaction” that accelerates AGCO’s strategic transformation. “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,” he added.

The JV will complement and enhance AGCO’s existing Precision Ag portfolio while supporting over 10,000 equipment models. By combining 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 growth and better provide next-generation technologies to even more farmers around the world, AGCO stated.

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

“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.”

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.