26 June 1998

Agco spells out policy for more acquisitions…

By Andy Collings

AGCOS purchasing philosophy is clear: If there is a machinery company having product lines which can make a useful contribution to their portfolio – and it offers a good distribution network – then that company will be of interest to Agco.

"Whether the company wants to sell or not, is not the issue," insists Agco chairman Bob Ratliff. "If a companys profits fall below the line, it ceases to be of use to shareholders and we are in a good position to make the acquisition."

Agcos meteoric rise – since 1990 annual sales have risen to $3.2bn and it now owns 15 brands including Massey Ferguson, Fendt and Hesston – has largely been through the acquisition of lame ducks, with Fendt being a possible exception.

Purchasing power, use of common assembly lines – White and Allis tractors are now being assembled at MFs Coventry base, for example – and marketing through larger distribution networks have appeared to turn purchased companies into profitable organisations.

Mr Ratliff does not hide his desire to further expand his companys empire. "I believe companies which are not full line and have a good distribution system will eventually find it hard to survive," he maintains. "These companies could eventually become Agco business."

He adds: "We continue to talk to all companies," he says. "Should the need for consultation occur, then we will look to acquire this company."