Over the years, I have seen and experienced the results of a number of equipment company mergers and acquisitions. One of the most notable was the 1985 merger of two popular brands, Case and International Harvester, to form the second-largest farm equipment company at the time.
As with many mergers, the combination was a result of economic pressures and offered benefits for both companies, including greater manufacturing efficiencies.
There are times that a merger or company acquisition can cause some issues. For example, differences in company cultures may not be easy to resolve. And, frankly, we in agriculture are fairly brand-oriented. A merger or acquisition might lead to the loss of a beloved brand, or parts and service support for that brand being difficult to obtain.
On the other hand, mergers and acquisitions can save brands and offer continued support for those branded products. AGCO, for instance, has revived and supported a variety of brands including Challenger, Massey Ferguson, Fendt, Valtra, Gleaner, White and Sunflower.
Mergers, acquisitions and business agreements also can bring new offerings to us here in the Midwest.
For example, Case IH (CNH Industrial) has announced it acquired the Australian agricultural implement manufacturer K-Line Ag, the No. 1 tillage manufacturer in Australia.
“The acquisition of K-Line Ag will bring Case IH customers the best complementary solution on the market for aggressive high-productivity soil management,” says Brad Crews, Case IH brand president. “In particular, the Speed-Tiller from K-Line Ag gives producers ideal seedbed preparation without agronomic compromise. The dual-season high-speed disk allows producers to achieve a higher level of productivity while ensuring a smooth seedbed surface and consistent seedbed floor.”
The Speed-Tiller by K-Line Ag will be added to the Case IH tillage product line in 2020 and will be available in Case IH dealerships throughout North America.
Case IH also has purchased ATI Inc., a global manufacturer of rubber track systems for high horsepower tractors and combine harvesters. Crews notes, “With the integration of ATI, Case IH will develop an even stronger track technology portfolio and extend our track leadership position in the marketplace.”
Both companies have a long history in track systems for high horsepower tractors. Case IH created the four-track high horsepower tractor segment with the introduction of the Steiger Quadtrac in 1996. Headquartered in Mount Vernon, Indiana, ATI Inc. was established in 1997 and initially specialized in rubber tracks used for seismic exploration on Alaska’s North Slope. Soon after, the company extended this technology to a range of agricultural tracks.
In some situations, a company may need to expand its equipment offerings so their dealers have a wider range of products to fit customer requirements and, possibly, attract new customers. A business partnership actually may work better than an acquisition.
In the early 2000s, John Deere introduced its Frontier line which offers a wide variety of equipment from non-John Deere companies. These products, now more than 600 in all, have been engineered and rebranded to specifically match Deere equipment and are sold exclusively through John Deere dealerships.
Recently, Deutz Corp. and Kukje Machinery of Korea entered into a long-term agreement to expand Deutz’s line of under-25-horsepower engines. As a result, D1.2 and D1.7 engines will now be available in the U.S. with Deutz parts and service support already in place.
A company also might partner with another to add expertise to its business offerings. We’re seeing more of that today as technology companies are being brought onboard to increase and improve ag machinery company product offerings.
Claas has announced a global partnership with The Climate Corporation, Bayer’s digital farming arm, and its FieldView digital farming platform, providing farmers with seamless connectivity and unlimited storage of machine-generated agronomic data directly to their FieldView account. Through this partnership, FieldView customers using Claas Telematics will gain secure cloud-to-cloud access to machine-generated insights including yield reports and maps, average grain moisture, as well as a digital record of the field worked, all in one place.
“Farmers have been collecting data from their farm equipment for decades. The same is true for weather data, soil data, crop performance data, the list goes on and on,” says Mike Stern, CEO of The Climate Corp. and head of digital farming for Bayer.
“These data sets become even more valuable to our customers when they can be combined with the advanced AI tools we are developing to help drive profitability and reduce risk on their farms. This partnership with Claas simplifies that process, helping farmers around the world use digital tools to sustainably increase their productivity.”
There are many reasons companies merge, are acquired or collaborate. There’s no doubt that economic situations often drive such business relationships. In the long-term, though, farmers most likely benefit.
Michael Gustafson has written for and about farm equipment companies, their products and dealerships for more than 40 years, including 25 years with John Deere. He lives on a small acreage in Dennison, Ill.