AGCOlooks out for more acquisitions
"WE are still looking to acquire more agricultural manufacturing companies," insists Robert Ratliff, chairman of North American machinery giant, AGCO.
With the ink on the Fendt deal still to dry, Mr Ratliff clearly has his sights set on expanding his companys empire into Europe and beyond. And, if the achievements of the past few years are anything to go by, there can be few who would doubt he will succeed.
Current line-up includes the North American companies of Allis, White Tractor, Gleanor and White-New Idea and Hesston, with the rest of the world contributing Massey Ferguson, Deutz-Argentina and now, of course, Fendt.
Mr Ratliff has high expectations for Fendt, believing that introducing it State-side will increase production significantly.
"Fendt sells very well against John Deere in Germany and also in several other European countries, so there is no reason to suppose a similar situation cannot be achieved in the States," he says.
"We will also increase our efforts to improve market share in other countries. In the UK it could mean offering a Fendt franchise to, say, an MF dealer or even a dealer selling another brand. If we have an area not being covered effectively, we want to fill it."
It is a view which emphasises AGCOs policy of treating each of its acquisitions as individual brands – not as a wholesale package.
But Mr Ratliff is the first to admit that size increases buying power and results in cheaper component prices overall. AGCO, for example, is now the worlds largest purchaser of agricultural tyres.
Which is all pretty straight- forward. But how is AGCO managing to continue its buying policy and what first prompted it?
"What is happening in European agriculture is parallelling events that happened in the States a few years ago," explains Mr Ratliff. "The only difference is that it happened virtually overnight in the States and it is taking several years to happen in Europe.
"Subsidies are gradually being withdrawn, farms are amalgamating, machinery is getting larger and less of it is sold. This, in turn, means some tractor and machinery manufacturers start to suffer and become ripe for acquisition."
So, which company is next on the shopping list? It is a question Mr Ratliff declined to answer. *
How the companies will contribute following the acquisitions of Fendt and Deutz-Argentina. Projected total sales worth $3.1bn.
Massey Ferguson 49%
White-New Idea 2%
White Tractor 1%
AGCO chairman Robert Ratliff (left) discusses his companys plans during an interview with FW Machinery Editor, Andy Collings.