U.S. ag equipment giant New Holland is set to enter the tillage equipment business and stretch out its space in the hay and forage market, with a deal for Danish manufacturer Kongskilde Industries.
New Holland’s parent CNH Industrial on Monday announced it will buy Kongskilde’s agricultural “grass and soil” business from Dansk Landbrugs Grovvareselskab (DLG Group) for an undisclosed sum, subject to the usual regulatory and antitrust approvals.
The deal includes the “well-established” Kongskilde, Overum and JF equipment brands. CNH CEO Richard Tobin said the new owner plans to “build upon these proud heritages and significantly increase their market access as part of our worldwide distribution network.”
The company’s hay and forage lines include forage harvesters, mowers and rakes, while its soil product lines include plows, cultivators, seed drills, rock pickers, fertilizer applicators, weeders, rotavators and vertical tillage units.
Kongskilde will continue to operate through its current sales organization and its dealer network, New Holland said.
The deal also includes Kongskilde’s manufacturing plants at Kutno, Poland, about 130 km west of Warsaw, and at Overum, Sweden, about 250 km southwest of Stockholm, plus assets including a lease contract for production work at Hudson, Illinois, about 150 km southwest of Chicago.
The deal doesn’t include Kongskilde Grain, the company’s grain handling equipment business, nor its Kongskilde Industry division, which makes handling equipment for industries including the paper, plastic and packaging sectors.
New Holland is no stranger to hay and forage, a market it entered with balers starting in 1940, but with Kongskilde’s tillage line, the deals sets up “a major extension and enhancement of New Holland’s offering with the addition of a key product portfolio,” CNH said.
Kongskilde is also well acquainted with the Canadian market, having entered North America selling cultivators and other tillage tools out of Exeter, Ont. in 1960. In 1978 it began selling its grain blower systems in Western Canada, launching the Grain Vac line.
The company’s North American grain handling and industrial equipment businesses moved from Canada to Bloomington, Ill. in 2002. Its tillage equipment production in Canada was shut down in 2003.
Kongskilde then outsourced its North American tillage equipment manufacturing to other suppliers until 2010, when it bought ag equipment manufacturer Progressive Farm Products and consolidated all its North American operations in the Bloomington area.
“The acquisition of the tillage and hay and forage activities of Kongskilde adds a key product range that will further broaden New Holland Agriculture’s product offering within the agricultural machinery sector,” Carlo Lambro, CNH’s brand president for New Holland Agriculture, said Monday in a release.
The Kongskilde dealer and importer network, he said, “will remain the reference point for their customers,” and New Holland “will also gradually integrate (Kongskilde’s) products in the New Holland portfolio.”
For Kongskilde’s parent firm, the deal is part of a broader plan to “divest non-core activities and strengthen the focus on its three core business areas,” DLG said Monday in a separate release.
“This transaction represents a milestone in our targeted process towards creating a leaner and more focused DLG,” said Kim Balle, DLG’s chief operating officer. “The transaction will also enable DLG to develop Kongskilde Industry and Kongskilde Grain even further.”
DLG, owned by Danish farmers, is already one of Europe’s biggest agribusinesses, dealing in farm supply, livestock feed and farm fuels, and is also a major exporter of seed, feed, milling grains, malting barley and rapeseed. — AGCanada.com Network