John Deere acquires German equipment manufacturer

Wirtgen Group manufactures equipment for road construction and recycling plants for asphalt production.

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June 13, 2017
CDR Staff
Concrete and Aggregates Construction Equipment & Products
Deere & Co., Moline, Illinois, has signed a definitive agreement to acquire the Wirtgen Group, a privately-held international company that manufactures equipment for road construction and plants for mining and processing minerals, and recycling materials for the production of asphalt.

The total transaction value is approximately $5.2 billion, including the assumption of net debt and other consideration. Deere expects the transaction to be accretive to earnings per share and currently expects to fund the acquisition from a combination of cash and new equipment operations debt financing. 

Headquartered in Germany, the Wirtgen Group has five brands across the entire road construction sector spanning milling, processing, mixing, paving, compaction and rehabilitation. Wirtgen's product portfolio enhances Deere's existing construction equipment offering. The Wirtgen Group has a global footprint with approximately 8,000 employees and sells products in more than 100 countries through a large network of company-owned and independent dealers.

"The acquisition of the Wirtgen Group aligns with our long-term strategy to expand in both of John Deere's global growth businesses of agriculture and construction," says Samuel R. Allen, Deere & Co. chairman and CEO. "Wirtgen's superb reputation, strong customer relationships and demonstrated financial performance are attractive as we expand the reach of John Deere construction equipment to more customers, markets and geographies."

Stefan Wirtgen, managing director at Wirtgen, says, "The Wirtgen Group has a legacy of technology and innovation with market-leading products and a strong focus on the customer. As we looked to the future, we specifically chose Deere as the buyer because of our long-held respect for the organization and our full confidence that Deere is dedicated to the ongoing success of the Wirtgen Group and our employees worldwide."

Deere plans to maintain the Wirtgen Group's existing brands, management, manufacturing footprint, employees and distribution network. The combined business is expected to benefit from sharing best practices in distribution, customer support, manufacturing and technology as well as in scale and efficiency of operations.

The transaction has been approved by Deere's board of directors. The purchase is subject to regulatory approval in several jurisdictions as well as certain other customary closing conditions. The companies said they expect to close on the transaction in the first quarter of Deere's 2018 fiscal year.