AGCO, Trimble Close Precision Ag Deal

AGCO Corporation and Trimble on Monday announced the closing of their $2 billion joint venture transaction. The joint venture, known as PTx Trimble, combines Trimble's precision agriculture business and AGCO's JCA Technologies to form a new company created to serve farmers with factory fit and retrofit applications in the mixed-fleet precision agriculture market.

AGCO has acquired an 85% stake in PTx Trimble, and Trimble will hold a 15% stake. Going forward, the PTx Trimble Joint Venture will be consolidated into AGCO's financial statements. JCA, based in Winnipeg, Manitoba, Canada, was purchased by AGCO in 2022. JCA specializes in the design of electronic systems and software development to automate and control agricultural equipment.

"Farmers worldwide need technologies that support them to be more productive and profitable while minimizing the environmental impact of their operations," Eric Hansotia, AGCO's chairman, president and CEO, said in AGCO's news release on Monday. "PTx Trimble will provide farmers greater access to next-generation precision ag tools, no matter what brands of tractors and implements they operate."

AGCO's consolidated precision ag revenue is now expected to exceed $2 billion by 2028. AGCO intends to grow its precision business around autonomy, precision spraying, connected farming and data management offerings applied as factory-installed options to its own equipment brands (Fendt, Massey Ferguson), and by way of its retrofitting AGCO technologies onto existing machinery -- both AGCO brands and competitors.

AGCO has said it has a list of 140 areas where it wants to automate farming operations.

AGCO 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.

"Farmers are the real winners here," Rob Painter, Trimble's president and CEO, said in the release announcing the closing of the joint venture. "By combining our expertise and resources through this (joint venture), we aim to accelerate the pace of innovation. With a focus on open technologies, customers will benefit from tech solutions available to farmers across a broad range of tractor and implement brands."

The joint venture will maintain the Trimble brand and the Trimble retail channels. But more, AGCO's Precision Planting offerings, AGCO OEM and 100 other OEMs also will bring new PTx Trimble technologies to market.

AGCO financed this transaction through a combination of $1.1 billion in recently issued senior unsecured notes, a $500 million term loan facility, other borrowings and cash on hand.

"I love our position," Hansotia told DTN/Progressive Farmer last year when the joint venture was first announced. "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 (is a) great combination."

Dan Miller can be reached at dan.miller@dtn.com

Follow him on Twitter @DMillerPF

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