Machinery giant CNH Industrial is expanding its precision agriculture capabilities by buying technology firm Raven Industries for $2.1bn (£1.5bn).
This is a 33.6% premium to Raven Industries’ four-week average share price on the US Nasdaq exchange.
The two companies have worked together for many years. CNH said the acquisition would add strong innovation capabilities in autonomous and precision agriculture technology.
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“Precision agriculture and autonomy are critical components of our strategy to help our agricultural customers reach the next level of productivity and to unlock the true potential of their operations,” said Scott Wine, CNH Industrial’s chief executive.
“Raven has been a pioneer in precision agriculture for decades, and their deep product experience, customer-driven software expertise and engineering acumen offer a significant boost to our capabilities.
“This acquisition emphasises our commitment to enhance our precision farming portfolio and aligns with our digital transformation strategy. The combination of Raven’s technologies and CNH Industrial’s strong current and new product portfolio will provide our customers with novel, connected technologies, allowing them to be more productive and efficient.”
CNH’s brands include Case IH, New Holland and Steyr tractors and farm machinery. It also makes construction earthmoving equipment, commercial vehicles, buses and coaches, vehicles used in quarrying, construction, firefighting, defence and civil protection, as well as engines and transmissions.
Raven has three main arms: precision agriculture, high-performance specialty films, and aerospace and defence solutions.
CNH said it would undertake a strategic review of the films and aerospace businesses to best position them for future success and maximise shareholder value. It said they represented attractive independent businesses with excellent near- and long-term potential.
The deal is expected to complete in the fourth quarter of this year and is subject to Raven shareholders’ and regulatory approvals.