The all-cash sale will cost American Industrial Partners US$700 million.
By Andrew Joseph, Farms.com; Image by Phil Reese from Pixabay
AGCO Corporation, a global leader in the design, manufacture, and distribution of agricultural machinery and precision ag technology, has announced it will sell the majority of its Grain & Protein business to American Industrial Partners, an industrial investor with approximately U$16 billion in assets under management.
The all-cash sale is valued at US$700 million and is subject to working capital and other customary closing adjustments.
"The divestiture of Grain & Protein supports AGCO's strategic transformation, recently accelerated by the PTx Trimble joint venture, which closed in April 2024," said Eric Hansotia, AGCO's Chairman, President, and Chief Executive Officer. "Divesting this business allows us to streamline and sharpen our focus on AGCO's portfolio of award-winning agricultural machinery and precision ag technology products, which underpins a long-term focus on high growth, high margin, and high free cash flow generating businesses."
He added, "AIP has extensive experience in the industrial sector and vast carve-out expertise, which we believe will unlock new potential for the Grain & Protein business. We believe the move will help ensure its brands continue to lead the market in grain, seed, and protein production equipment and remain well-positioned to deliver for farmers.”
AGCO expects to use the net proceeds from the transaction consistent with its stated capital allocation priorities, including debt repayment, disciplined investment in technology and organic growth initiatives, and return of capital to shareholders.
The transaction includes the sale of five primary Grain & Protein brands:
- GSI;
- Automated Production (AP);
- Cumberland;
- Cimbria, and;
- Tecno.
The sale excludes AGCO's Grain & Protein business in China.
The transaction is anticipated to close before the end of the year, subject to regulatory approvals and other customary closing conditions.
Founded in 1990 and headquartered in Duluth, Georgia, USA, AGCO had net sales of approximately $14.4 billion in 2023. Its core brands include Fendt, GSI, Massey Ferguson, PTx, and Valtra. For more information, visit www.agcocorp.com.
AIP’s investment portfolio includes aerospace and defense, automotive, building products, capital goods, chemicals, industrial services, industrial technology, logistics, metals and mining, and transportation, among others. With annual revenues of ~$25 billion, it employs approximately 65,000 employees. More information can be found at www.americanindustrial.com.