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US equipment manufacturer John Deere is to acquire the Wirtgen Group for an estimated US$5.2 billion.

Headquartered in Germany, the Wirtgen Group claims to be the global leader in the manufacture of road construction equipment. The group boasts five premium brands – Wirtgen, Vögele, Hamm, Kleemann and Benninghoven – spanning milling, processing, mixing, paving, compaction and rehabilitation operations.

Samuel R Allen, Deere & Company chairman and chief executive officer, said, “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.”

He added, “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.”

The firm also confirmed that it planned to maintain the Wirtgen Group’s existing brands, management, manufacturing footprint, employees and distribution network.

Wirtgen Group co-managing partner Stefan Wirtgen said the group has a “legacy of technology and innovation with market-leading products and a strong focus on the customer”.

He said, “As we looked to the future, we specifically chose Deere as the buyer because of our long-held respect for the organisation and our full confidence that Deere is dedicated to the ongoing success of the Wirtgen Group and our employees worldwide.” 

His brother and co-managing partner Jürgen added, “We believe this transaction allows the company to be successful well into the future – independent of our family ownership.”

Max Guinn, president of Deere’s construction and forestry division, said, “The Wirtgen Group strengthens Deere’s strong position in the construction equipment industry, enhances our ability to serve customers across the globe and improves Deere’s competitive position through the addition of market-leading products.”

He said spending on road construction and transportation projects had grown at a faster rate than the overall construction industry and tended to be less cyclical.

He added there was recognition globally that infrastructure improvements had to be a priority, and roads and highways were among the most critical in need of repair and replacement.

The transaction is subject to regulatory approval in several jurisdictions. The companies said they expected to close on the transaction in the fourth quarter of the 2017 calendar year.

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