American equipment major John Deere & Company has announced it has completed its acquisition of the Wirtgen Group six months after it announced a $5.2bn deal to take over the German road-building machinery specialist.
With the acquisition, John Deere has become the first manufacturer to have both crushing and screening as well as mobile equipment under one parent group. Deere funded the purchase through a combination of cash and debt and can now, with Wirtgen in its stable, offer road building equipment in its portfolio, which it did not have before.
Deere first announced the deal in June this year, terming Wirtgen “the leading manufacturer worldwide of road construction equipment.” Besides the Wirtgen brand, the Wirtgen Group includes other notable brands such as Hamm, Kleemann, Vogele, Ciber and Benninghoven, each a stalwart in its field. Together they make up a line-up of compactors, asphalt pavers and road milling machines.
“The Wirtgen Group will enhance the size, scale and stature of our construction equipment business and will help Deere continue its global growth,” said Sam Allen, chairman and CEO of Deere & Company in a statement. The acquisition falls in line with “Deere’s long-term strategy to expand in both agriculture and construction,” he added.
Back in June, when first announcing the deal, Allen had said: “While head of the [Deere] C&F (Construction & Forestry) division in the mid-2000s, I met with the Wirtgen family to discuss the possibility of pursuing strategic opportunities such as this one, and we stayed in close touch ever since.
“Then, when Stefan and Jurgen Wirtgen decided to sell their business and move on to other opportunities, they reached out to Deere and we were honoured they did. We’re glad from a timing standpoint, but this is just something that we strategically have had in mind for quite some time, and in the absence of a financial crisis, we would have gone ahead and pulled this trigger, because of how attractive it is.”
Deere said it plans to maintain each of the Wirtgen Group’s existing brands along with the group’s management, manufacturing footprint, employees and distribution network. “The combined business is expected to benefit from sharing best practices in distribution, customer support, manufacturing and technology as well as in scale and efficiency of operations,” Deere said.
Stefan Wirtgen, managing director, 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.”
Jürgen Wirtgen fellow Wirtgen managing director, added: “We believe this transaction allows the company to be successful well into the future — independent of our family ownership.”
