AGCO entered into a definitive agreement to sell the majority of its Grain & Protein business to American Industrial Partners (AIP) in an all-cash transaction, valued at $700 million.
“The divestiture of Grain & Protein supports AGCO’s strategic transformation, recently accelerated by the PTx Trimble joint venture, which closed in April 2024,” said Eric Hansotia, AGCO’s Chairman, President and Chief Executive Officer. “Divesting this business allows us to streamline and sharpen our focus on AGCO’s portfolio of agricultural machinery and precision ag technology products, which underpins a long-term focus on high growth, margin and free cash flow generating businesses.”
“AIP has extensive experience in the industrial sector and vast carve-out expertise, which we believe will unlock new potential for the Grain & Protein business. We believe the move will help ensure its brands continue to lead the market in grain, seed and protein production equipment and remain well-positioned to deliver for farmers,” added Hansotia.
AGCO expects to use the net proceeds from the transaction consistent with its stated capital allocation priorities, including debt repayment, disciplined investment in technology and organic growth initiatives and return of capital to shareholders.
The transaction perimeter to be sold includes the five primary Grain & Protein brands: GSI, Automated Production (AP), Cumberland, Cimbria and Tecno. The transaction perimeter to be sold excludes AGCO’s Grain & Protein business in China.
AGCO will begin reporting Grain & Protein as held for sale in the company’s consolidated financial statements for the second quarter of 2024 through the closing date. The company expects to incur a loss on the sale of the business in the range of $450 million to $475 million.
The transaction is anticipated to close before the end of the year, subject to regulatory approvals and other customary closing conditions.
