Metro Atlanta-based AGCO Corp. has announced plans to acquire the forage division of Dutch dairy equipment provider Lely Group.
Though the deal hasn’t been cleared by regulators, AGCO and Lely said they had reached an agreement in principle on the sale. Financial terms were not disclosed.
Both companies framed the deal in terms of mutual benefit, albeit in opposite directions. AGCO would add Lely’s balers and loader wagons to its already expansive portfolio of products, while exiting the forage business would allow Lely to focus on its strong suit: innovative technologies like its milking robot.
“Lely intends to focus entirely on its role as innovator in the field of robotisation, and sensor and data systems for use on dairy farms. Over the last 15 years, these product groups have grown into a successful activity for Lely, with a great deal of potential for the future,” said CEO Alexander van der Lely in a news release.
AGCO would gain two factories in Germany, while a forage machines factory making mowers, tedders and rakes in Lely’s hometown of Maassluis, the Netherlands, will be closed by March 31, 2018, according to the Lely news release. Employees in the Netherlands will stay with Lely, but 95 employees “temporarily seconded” to AGCO would face an uncertain future.
AGCO, an agricultural equipment giant, had revenues of $7.4 billion last year and is active all over the world.
CEO Martin Richenhagen hails from Germany and is the chairman of Atlanta’s German-American Chamber of Commerce of the Southern U.S. Inc.
He’s also the keynote speaker of the Gwinnett Chamber of Commerce’s upcoming Movers and Makers award ceremony honoring manufacturers and logistics providers.