Deere & Company $DE has signed a definitive agreement to acquire the #Wirtgen Group, a privately-held German company that is a manufacturer worldwide of road construction equipment.
The purchase price for the equity is EUR 4.357 billion in an all-cash transaction. The total transaction value is approximately EUR 4.6 billion, or $5.2 billion based on current exchange rates, including the assumption of net debt and other consideration.
The Wirtgen Group had sales of EUR 2.6 billion in the year ending December 31, 2016.
Deere expects the transaction to be accretive to earnings per share and currently expects to fund the acquisition from a combination of cash and new equipment operations debt financing.
The Wirtgen Group has a global footprint with approximately 8,000 employees and sells products in more than 100 countries through a large network of company-owned and independent dealers.
Deere (DE) plans to maintain the Wirtgen Group’s existing brands, management, manufacturing footprint, employees and distribution network.
The combined business is expected to benefit from sharing best practices in distribution, customer support, manufacturing and technology as well as in scale and efficiency of operations. The transaction has been approved by Deere’s Board of Directors.
The purchase is subject to regulatory approval in several jurisdictions as well as certain other customary closing conditions.
The companies said they expect to close on the transaction in the first quarter of Deere’s 2018 fiscal year.
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