US-based Agco has announced that it has reached agreement in principle to acquire the forage division of the Dutch-based Lely Group.
Lely’s forage division is a leading manufacturer of balers and loader wagons in Europe.
The transaction is subject to regulatory approval and is expected to complete in the fourth quarter of 2017. A process for employee consultation will also be started.
“The integration of Lely’s industry-leading competence in hay and forage technology will further strengthen Agco’s full line product offering,” the company’s chairman, president and chief executive, Martin Richenhagen, said.
The intended sale of its Forage activity will allow Lely to fully concentrate, on the Dairy segment; the development of milking robots and other innovations for increasing the efficiency sustainability and animal welfare ondairy farms. Thanks to its unique expertise with automated systems, Lely will be able to further strengthen its leading position as innovator in the Dairy sector worldwide.
The takeover allows Agco Corporation to further broaden its range of forage harvesting machines.
Until now, the Lely family business focused on two totally different product categories and markets with its dairy and forage business units. Some time ago, the company started a strategic reorientation and this analysis revealed that to be able to continue operating successfully in the market, the organisation must adapt to the increasingly wide range of requirements of its different product groups.
The result of this strategic reorientation is that Lely plans to focus on the development of robotics and other innovations in dairy farming.
Chief executive Alexander van der Lely said the company intends to focus entirely on its role as innovator in the field of robotisation, and sensor and data systems for use on dairy farms.
“During the past 15 years, these product groups have grown into a successful activity for Lely, with a great deal of potential for the future,” he added. “Besides the innovative milking robot, other products have also been developed that are primarily based on automation with the aid of robots.”
The production of these Dairy machines will stay in Maassluis (The Netherlands), Pella (Unites States) and Leer (Germany).