AGCO Corporation (NYSE:AGCO) has announced a joint venture (JV) with Trimble Navigation Limited (NASDAQ:TRMB) that will see it paying $2 billion to acquire an 85% interest in Trimble’s agriculture technology business. AGCO will also contribute its JCA Technologies business to the JV.
Shares of both companies rose in early Thursday afternoon trading.
The companies said in a statement that the JV is aimed at creating a global leader in mixed fleet smart farming and autonomy solutions, competing against the likes of Deere & Co.
"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,” commented Trimble president and CEO Rob Painter
“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 (original equipment manufacturers) together.”
AGCO said the JV will complement its existing Precision Ag portfolio to deliver even more industry-leading solutions across the crop cycle while supporting over 10,000 equipment models.
“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,” AGCO CEO Eric Hansotia added.
“All of these touchpoints will result in us being even more farmer-focused.”
Trimble said it expects roughly $3 billion in value from the transaction from pre-tax cash proceeds, its 15% stake in the JV, and the related commercial agreements.
The deal is expected to close in the first half of 2024, subject to regulatory approval.
AGCO’s shares traded 2% higher at $119.88 by noon in New York. Trimble’s stock rallied 5.6% to $51.98.
Contact the author at stephen.gunnion@proactiveinvestors.com