WESTERN PRODUCER — Agco has acquired 85 percent of Trimble Ag assets and technologies at a cash price of $2 billion.
The deal was announced as a joint venture Sept. 28. An Agco release said it creates a precision ag platform that enables Trimble to provide a variety of technologies compatible across major brands and equipment models.
Andrew Sunderman, Agco’s senior integration lead, said the deal enhances Agco’s offerings with technologies that cover every aspect regardless of brand.
In an online interview, he said the joint venture enhances the existing precision ag portfolio that supports more than 10,000 equipment models. It increases the company’s commitment to autonomy, precision spraying, connected farming and data management. Combining the two precision ag portfolios will allow access to Trimble Ag, Agco OEM, other OEMs and other aftermarket entities.
“I wouldn’t call it a niche but I would say there is a gap in the market for folks who genuinely care about improving the capabilities of equipment, regardless of the age, regardless of the brand and regardless of the practice or process that they are working on in the field. That’s at the heart of what we’re trying to do,” said Sunderman.
“Outside of Trimble AG and outside of Precision Planting there are very few solutions, if any, that allow for a complete seamless experience. We now have the latest technology in application equipment that addresses not only Agco equipment, but any brand in any age of machine that a farmer may use in their operation.”
Sunderman said Trimble gains access to a large dealer network, factory-installed OEM equipment and Agco’s retrofit channel that serves farmers with any brand of machine. In addition, Agco has skilled teams knowledgeable in all parts of the crop cycle, where Trimble has not been previously focused.
“I think we’re going to be very hard-pressed to get operators out of the cab if we cannot use real-time information from in-field to control the implement.”
Canadian Association of Agri-Retailers executive director Mitch Rezansoff said the joint venture is a move by Agco to catch up with John Deere and CNH. He pointed out that Deere launched their precision ag and autonomous technology six years ago when they bought California-based Blue River Technology. CNH played technology leapfrog when they bought Raven two years ago.
“Agco wanted to offer a complete package. I’m not opposed to this happening. I can understand why they’re doing it. They want a standardized system across their entire portfolio. It’s the old one-stop-shop idea,” said Rezansoff.
“I suspect they will not make it exclusive to Agco equipment, so a farmer could buy Trimble systems for Deere or CNH, just as John Deere systems can now be used on non-Deere equipment.”
According to Trimble CEO Rob Painter, “Growers are looking for mixed fleet solutions across their tractors and the implements they use to efficiently farm. The (joint venture) complements the mixed fleet approach they developed with their Precision Planting business model.”
As part of the financial arrangement, all four components of Agco’s grain and protein business will be placed under strategic review:
- GSI helps farmers and commercial operators by enhancing grain storage, conditioning and management.
- Cimbria helps seed, grain, feed and food producers protect the potential of seed and grain with processing solutions.
- Cumberland integrated systems support poultry and swine health and productivity with climate control, housing, biosecurity, feeding and watering.
- Tecno helps egg producers protect the well-being of birds by engineering a system with responsible housing and expert support designing the right solution.
The Agco-Trimble deal is expected to be funded through existing liquidity, free cash flow and new debt.
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