AGCO Corporation and Trimble on Thursday announced a $2 billion deal that is forming a joint venture to deliver innovations in automation and autonomy to farming operations. The joint venture will be the exclusive provider of Trimble Ag's technology. Trimble Ag represents about 20% of Trimble's overall technology business.
"We are super happy right now," AGCO CEO Eric Hansotia told DTN/Progressive Farmer on Thursday morning. "It's the biggest ag tech deal in history, and essentially it combines Trimble's ag assets, everything they do in the ag industry, with (AGCO's) precision ag business." AGCO intends to grow its business around autonomy, precision spraying, connected farming, data management and sustainability. It has promised to deliver technologies by 2030 giving farmers full-season autonomous capabilities.
"(This is) a marriage of two super-innovative teams serving every single farmer regardless of what brand-new equipment they have," Hansotia said. The joint venture has many opportunities ahead of it. AGCO has a list of 140 areas where it wants to automate farming operations, building toward autonomous applications.
Key to AGCO's technology strategy has been building systems that can be applied in the factory or retrofitted onto existing machines. AGCO's strategy mirrors the technology space where Trimble has built its reputation for innovation -- especially its guidance technologies. Trimble Ag's hardware, software solutions and cloud-based applications span the crop cycle and are applied across brands, equipment models and farm types.
The joint venture will maintain the Trimble brand and the Trimble retail channels. But more, Precision Planting, AGCO OEM and 100 other original equipment manufacturers will also bring new AGCO-Trimble joint venture technologies to market. Trimble's ag systems have been placed on 10,000 pieces of equipment.
"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," Rob Painter, CEO of Trimble, said in Thursday's release. "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 together."
Hansotia said, "We intend for the joint venture to work hand in hand in a very integrated way with our Precision Planting business. To the market, (this) whole collection of tech talent will be working together to accelerate innovation, develop more solutions for farmers, solve more farmer problems in the simplest way possible, and add value."
With the joint venture, Georgia-based AGCO (Fendt, Massey Ferguson, Precision Planting and Valtra) is acquiring an 85% interest in Colorado-based Trimble Ag's portfolio of agricultural assets and technologies for $2 billion in cash and the contribution of JCA Technologies. JCA Technologies, Winnipeg, Manitoba, Canada, is a leading developer of autonomous agricultural systems. JCA was acquired by AGCO in May of 2022.
"I love our position," Hansotia said. "We will absolutely be a leader in mixed fleet(s). This is differentiation that we have carved out and also Trimble has carved out. We're the only two that really pursued that area, bringing them together in a great combination and culture. We will absolutely be the leader in global mixed-fleet solutions.
"The DNA of AGCO, as we redesigned our strategy, is to put farmers at the heart of everything we do. We call it 'farmer first,'" Hansotia said. "That's what's been driving our innovation; it will drive this (joint venture) as well. We have just bought a lot more capacity to be in a farmer-focused way. Our job is to continue to make the farmer more profitable through productivity and more sustainable through better use of their inputs. It was fertilizer, chemical seed, fuel, labor. And now we're also including water and a carbon-trading network. (This) expansion of capability to add productivity tools, and sustainability tools, has taken a giant leap forward on behalf of the farmer."
The AGCO-Trimble agreement is set to close in the first half of 2024.
AGCO is also announcing Thursday that its grain and protein business will be placed under strategic review as part of AGCO's broader portfolio transformation.
Dan Miller can be reached at firstname.lastname@example.org
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