John Deere Acquires Wirtgen Group

In the significant development of 180 years old Deere & Company's history, a new leaf was written on the 1st of June 2017. The all-cash transaction worth €4.357 billion purchase price of Wirtgen Group's equity, with the total transaction valued at €4.6 billion includes the assumption of net debt and other consideration. Wirtgen Group's Managing Partners Jürgen and Stefan Wirtgen were finally convinced to sell their company, after being the leading manufacturer of road construction equipment in the world since the last two decades. The three John Deere's individuals, Samuel R Allen, Chairman & CEO, Deere & Company; Max A Guinn, President, Worldwide Construction & Forestry; and Domenic G Ruccolo, Senior Vice President, Worldwide Construction & Forestry were responsible to acquire the privately-held German leading manufacturer of road construction equipment in the world.

Samuel R. Allen, Deere & Company, Chairman and CEO enthused, "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. 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."

Germany-based, the Wirtgen Group has five premium brands across the entire road construction sector spanning milling, processing, mixing, paving, compaction and rehabilitation. Wirtgen's highly complementary product portfolio enhances Deere's existing construction equipment offering to establish Deere & Company, as an industry leader in global road construction. Wirtgen Group's 8,000 employees, stationed in more than 100 countries, the company sells its world-class products and services through a large network of company-owned and independent dealers.

"The Wirtgen Group has a legacy of technology and innovation with market-leading products and a strong focus on the customers. As we looked to the future, we specifically chose Deere as the buyer, because of our long-held respect for the organization. Our full confidence, Deere is dedicated to the ongoing success of the Wirtgen Group and our employees worldwide," stated Stefan Wirtgen, Managing Partner, Wirtgen Group.

Deere's Board of Directors has approved the transaction. However, the purchase is subject to regulatory approval in several jurisdictions, as well as, certain other customary closing conditions. The expected closing on the transaction may take place in the first quarter of Deere's 2018 fiscal year. The Boston Consulting Group served as a strategic advisor. Transaction advisors included Citigroup as exclusive financial advisor to Deere, Linklaters LLP as deal legal counsel, Kirkland & Ellis LLP as securities legal counsel and EY as accounting and tax advisor.

"This transaction enhances our global distribution options in construction equipment and enhances our capabilities in the emerging markets. Spending on road construction and transportation projects has grown at a faster rate, than the overall construction industry and tends to be less cyclical. 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," revealed the President Max A Guinn, Worldwide Construction & Forestry.

Deere & Company 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.

"Our company's strength and success comes from dedicated employees who are focused on helping customers succeed in the road construction industry. We believe this transaction allows the company to be successful well into the future - independent of our family ownership," added Jürgen Wirtgen, Managing Partner, Wirtgen Group.

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