12 May 2000

CNH commences sell-off to meet competition rules

By Peter Hill

CNH Global has begun the multiple product and manufacturing facility sell-offs it must undertake to satisfy competition authority concerns.

As expected, CNH has negotiated the sale of its half-share in US-based grass machinery manufacturer Hay & Forage Industries to its 50:50 partner in the business, Agco Corporation.

Agreement has also been reached to sell the Laverda combine business and Case IH line of big square balers to Italian farm machinery group ARGO. This company already owns tractor maker Landini and implement company Fort & Pegoraro.

The deals are subject to approval by competition authorities in the US and Europe but are thought unlikely to be opposed.

The North American deal gives Agco full ownership of Kansas-based HFI, the Hesston joint venture it has shared with Case since 1991. This is the second time a Fiat-owned agricultural company has had to give up the business. Fiat was forced by US anti-trust authorities to sell the Hesston operation to secure agreement for the merger of Fiatagri and Ford New Holland.

Apart from a range of grass mowers, swathers and conventional balers sold mainly in North America, HFI is best known for its big square balers, including the giant Hesston 4900, which started the trend towards big-bale packages. In recent years, this machine has been sold in Hesston, New Holland and Massey Ferguson colours in Europe, plus Case-IH livery in North America.

Agco will continue to supply CNH Global with US-market balers and other grass machinery until the end of March next year when CNH expects to have its own Case-IH line ready. This may be based on the New Holland range, which includes big square balers built in Belgium, so creating CNHs first common platform line.

Kansas plant

The Kansas plant will become Agcos sole manufacturing centre in North America. The company is moving implement and Gleaner combine production there from plants scheduled for closure.

The Italian ARGO groups planned acquisition of the New Holland Laverda combine range (excluding hillside models), the factory at Breganze in Italy where they are made, and the Case-IH line of big square balers, substantially strengthens the Italian groups position as a full-line supplier. It already has Fort mowers, tedders and round balers in its portfolio, along with Pegoraro cultivations equipment. Both lines, as well as ARGOs Landini tractors, are sold in the UK through Kings Lynn-based distributor Motokov.

Under terms of the merger agreement with the European Commission, ARGO should be able to supply the balers to Case-IH dealers in several EU markets, including the UK, as well as Laverda combines to New Holland dealers.

The baler and combine acquisitions will not only add to sales revenues but should strengthen the Landini marques strategic position with dealers that want complementary equipment to run alongside their tractor franchises.

Landini tractor production climbed to 17,000 units last year, making it the Wests fifth largest manufacturer ahead of Valtra (15,000) and Renault (10,500). &#42

Laverda combines will, in future, be built by Italian Landini tractor maker ARGO if a deal with CNH Global is approved by the European Commission. ARGO already owns implement company Fort and Pegoraro.