Deere to acquire Wirtgen for $5.2 billion

Deere & Co. signed a definitive agreement to purchase the Wirtgen Group, a privately held international company, for $5.2 billion.

The companies expect to close on the transaction in the first quarter of Deere’s 2018 fiscal year.

Headquartered in Germany, the Wirtgen Group has several brands – Wirtgen, Kleemann, Vögele, Hamm, Benninghoven and Ciber – across the entire road construction sector spanning milling, processing, mixing, paving, compaction and rehabilitation. Deere plans to maintain the Wirtgen Group’s brands, management, manufacturing footprint, employees and distribution network.

According to Deere, the addition of Wirtgen enhances its existing construction equipment offering and establishes the company as a leader in global road construction. The Wirtgen Group has about 8,000 employees and sells products in more than 100 countries through a 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,” says Samuel Allen, Deere & Co. chairman and CEO. “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.”

Max Guinn, president of Deere’s Worldwide Construction & Forestry Division, echoed Allen’s sentiment about the acquisition.

“This transaction enhances our global distribution options in construction equipment and enhances our capabilities in emerging markets,” Guinn says. “Spending on road construction and transportation projects has grown at a faster rate than the overall construction industry and tends to be less cyclical. 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.”

Stefan Wirtgen, a managing director at Wirtgen, shared sentiments on the deal, as well.

“The Wirtgen Group has a legacy of technology and innovation with market-leading products and a strong focus on the customer,” he says. “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, another managing director at Wirtgen, agrees.

“We believe this transaction allows the company to be successful well into the future – independent of our family ownership,” Jürgen Wirtgen says.