John Deere to Acquire the Wirtgen Group
Deere & Company has signed a definitive agreement to acquire the Wirtgen Group, a privately-held international company that is the leading manufacturer worldwide of road construction equipment.
The purchase price is EUR 4.357 billion in an all-cash transaction. The total transaction value is approximately EUR 4.6 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 premium brands across the entire road construction sector spanning milling, processing, mixing, paving, compaction and rehabilitation. 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,” said Samuel R. Allen, Deere & Company Chairman and Chief Executive Officer. “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.”
Deere & Company plans to maintain the Wirtgen Group’s existing brands, management, manufacturing footprint, employees and distribution network.
“The Wirtgen Group has a legacy of technology and innovation with market-leading products and a strong focus on the customer,” Stefan Wirtgen, Managing Director at Wirtgen, said. “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.”
The transaction has been approved by the Deere & Company Board of Directors and 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 & Company’s 2018 fiscal year.
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