AGCO sells grains and proteins unit for US$700 million

AGCO Corporation announced the sale of the majority of its grain and protein business to American Industrial Partners (AIP) in an all-cash transaction valued at $700 million, subject to working capital and other customary closing adjustments. .

According to Eric Hansotia, chairman, president and CEO of AGCO, "the divestment of the grains and proteins business supports AGCO's strategic transformation, recently accelerated by the PTx Trimble joint venture, completed in April 2024."

Hansotia added that the sale will allow AGCO to focus on its portfolio of award-winning agricultural machinery and precision agricultural technology products, with a long-term focus on high-growth, high-margin and high free cash flow generating businesses.

AIP, known for its vast experience in the industrial sector and expertise in spin-offs, was chosen to drive the new potential of the grains and proteins business. Hansotia believes this move will help ensure that AGCO brands continue to lead the grain, seed and protein production equipment market, while remaining well positioned to serve farmers.

The net proceeds from the transaction will be used in accordance with AGCO's capital allocation priorities, including debt repayment, disciplined technology investments, organic growth initiatives and returns of capital to shareholders. The perimeter of the transaction includes AGCO's five main grain and protein brands: GSI, Automated Production (AP), Cumberland, Cimbria and Tecno. The transaction does not include AGCO's grain and protein business in China.

The transaction is expected to close before the end of the year, subject to regulatory approvals and other customary closing conditions.