Deere & Company is going to acquire the Wirtgen Group, a privately held international company headquartered in Windhagen, Germany, that is the leading manufacturer worldwide in the road construction industry, for $5.2 billion US based on current exchange rates.
The Wirtgen Group has sales of $2.6 billion EUR in the year ending Dec. 31, 2016.
“The Wirtgen Group has a legacy of technology and innovation with market-leading products and a strong focus on the customer," said Stefan Wirtgen, managing partner at Wirtgen. "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.”
“Our company’s strength and success comes from dedicated employees, who are focused on helping customers succeed in the road construction industry," said Jürgen Wirtgen, managing partner at Wirtgen. "We believe this transaction allows the company to be successful well into the future – independent of our family ownership.”
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, manufacturing and technology as well as in scale and efficiency of operations.
The Wirtgen Group has five premium brands with market-leading positions across the entire road construction segment spanning processing, mixing, paving, compaction and rehabilitation. The Wirtgen Group has more than 8,000 employees and sells products in more than 100 countries.
“The Wirtgen Group’s superb reputation, strong customer relationships and demonstrated financial performance are attractive as Deere expands its reach in construction equipment to more customers, markets and geographies," said Samuel R. Allen, Deere & Company chairman and CEO.
“The Wirtgen Group strengthens Deere’s strong position in the construction equipment industry, enhances our ability to serve customers across the globe and improves Deere’s competitive position through the addition of market-leading products," said Max Guinn, president of Deere’s construction and forestry division.
Guinn said spending on road construction and transportation projects has grown at a faster rate than the overall construction industry and tends to be less cyclical. He added there is recognition globally that infrastructure improvements must be a priority and roads and highways are among the most critical in need of repair and replacement.
The transaction is subject to regulatory approval in several jurisdictions. The companies said they expect to close on the transaction in the fourth quarter of the 2017 calendar year.
Source: Wirtgen Group, John Deere