AGCO is expanding its forage equipment business, acquiring the forage division of Lely Group.
Lely, which is known more for its dairy equipment in North America, manufactures balers, loader wagons, mowers and rakes in Europe.
The two companies have reached an agreement-in-principle, which is expected to close in the fourth quarter of 2017.
“The integration of Lely’s industry leading competence in hay and forage technology will further strengthen AGCO’s full line product offering,” said Martin Richenhagen, AGCO’s Chairman, President and Chief Executive Officer.
Lely, meanwhile, is focusing on the development of robotics and other dairy innovations, said CEO Alexander van der Lely.
“Lely intends to focus entirely on its role as innovator in the field of robotisation, and sensor and data systems for use on dairy farms. Over the last 15 years, these product groups have grown into a successful activity for Lely, with a great deal of potential for the future,” he said.
Production of Lely’s dairy products will remain in the Netherlands, Germany and the U.S.