Moline, Illinois-based Deere & Company (NYSE: DE) said it agreed to acquire privately-held German road construction equipment manufacturer Wirtgen Group from the Wirtgen family, for an equity value of EUR 4.357 billion in cash, reflecting an enterprise value of EUR 4.6 billion (USD 5.2 billion) including the assumption of debt.

The Wirtgen Group, founded in 1961 by Reinhard Wirtgen, has five premium brands across the entire road construction sector spanning milling, processing, mixing, paving, compaction and rehabilitation. Wirtgen has a global footprint with 8,000 employees and sells products in more than 100 countries through a large network of company-owned and independent dealers, generating sales of EUR 2.6 billion in 2016.

In 1837, John Deere, blacksmith and inventor, had little more than a blacksmith shop, a piece of discarded polished steel, and an idea that would help farmers, changing the face of agriculture for all time. Wirtgen’s highly complementary product portfolio enhances Deere’s legacy encompassing more than 175 years and establishes Deere as an industry leader in global road construction.

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

Jürgen Wirtgen, Managing Director at Wirtgen, added, “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.”

“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,” said Samuel R. Allen, Deere’s 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 Division, said, “This transaction enhances our global distribution options in construction equipment and enhances our capabilities in 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.”

Deere expects the deal 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. Deere plans to maintain Wirtgen’s existing brands, management, manufacturing footprint, employees and distribution network.

The deal has been approved by Deere’s Board of Directors, and is expect to close in the first quarter of Deere’s 2018 fiscal year, subject to regulatory approval in several jurisdictions as well as other customary closing conditions.

Citigroup acted as exclusive financial advisor to Deere. Linklaters LLP acted as Deere’s deal legal counsel, Kirkland & Ellis LLP as securities legal counsel and EY as accounting and tax advisor. The Boston Consulting Group served as Deere’s strategic advisor.



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