Deere & Company announced June 2 that it has signed a definitive agreement to acquire the Wirtgen Group, the world’s largest road construction equipment manufacturer.
Deere plans to buy the German-based company for EUR 4.357 billion in an all-cash transaction (about $5.2 billion based on current exchange rates). Wirtgen Group specializes in brands that span the entire road construction sector, including milling, processing, mixing, paving, compaction and rehabilitation. Wirtgen’s global footprint includes around 8,000 employees across more than 100 countries connected by a large network of company-owned and third party 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 R. Allen, Deere & Company Chairman and Chief Executive Officer. “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 Divison, says spending on road construction and transportation projects is less cyclical and has grown at a faster rate than the overall construction industry.
“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.
Deere’s board of directors approved the transaction, and the purchase is still subject to regulatory approval in several jurisdictions and must meet other customary closing conditions.