Around the world, modern agricultural methods rely increasing on technology and automation. At the forefront of the latter is AGCO, one of the world’s largest manufacturers of agricultural equipment.
With a company mantra that reads: “There’s the field where farmers use our machines. And then there’s the field of agricultural equipment makers like AGCO…And figuratively speaking, we’re doing everything we can to un-level it”; AGCO products are sold through five core brands: Challenger, Fendt, GSI, Massey Ferguson, and Valtra.
Challenger is responsible for manufacturing tractors, combine harvesters and hay equipment for the global market. Fendt make high tech tractors and combine harvesters in Europe.
GSI is involved in grain storage, grain drying and conditioning equipment, as well as material handling and its products are distributed worldwide.
The Massey Ferguson brand is another well-known name around the globe and manufactures a full-line of tractors, combine harvesters and hay equipment; while Valtra is a manufacturer of tractors in Europe and South America, where it also makes combine harvesters.
The company is headquartered in Duluth, Georgia and its global reach is achieved through a network of more than 3,100 independent dealers and distributors in more than 140 countries.
Whilst the AGCO name is relatively new, having been augmented in 1990, following a buy-out by executives of Deutz-Allis North American operations from the parent corporation KHD, (Klöckner-Humboldt-Deutz), the company’s roots can be dated back to the 19th century.
“We have an incredible story. In a surprisingly short amount of time, we’ve brought together decades of collective been-there-done-that history and roll-up-your-sleeves know-how,” states the corporate website.
Following the buy-out, the new business began to manufacture and distribute agricultural equipment under the AGCO® Allis and Gleaner® brand names. Within a year the company was on the acquisition trail and in 1991 purchased Hesston Corporation, a leading North American brand of hay tools, and a 50 per cent participation in the manufacturing joint venture with Case International, known as Hay and Forage Industries (HFI). In mid-year, AGCO also purchased the White tractor business from Allied Products. Both acquisitions expanded the AGCO dealer network, while the brand identities were retained.
Such was the company’s success that in 1992 AGCO provided an initial public offering of one-half of its stock and became listed on NASDAQ. Subsequently, it became listed on the NYSE under the symbol “AG” in 1994.
Acquisitions continued to develop the AGCO name throughout the decade; in 1994 the business bought Massey Ferguson and in 1997 made a major acquisition of Fendt GmbH, the leading German tractor business, and enhanced its access to the world’s most advanced tractor technology. Fendt is renowned for its technology and international market share leadership.
Having announced plans to open 2 manufacturing sites in China in late 2009, AGCO revealed plans to invest in North American manufacturing by expanding high-horsepower wheeled tractor manufacturing production in Jackson, Minnesota in 2011. A state-of-the-art visitor center was subsequently opened in early 2012.
While acquisitions have continued to strengthen the arm of AGCO, innovation and investment have equally contributed to the company’s ongoing success, as the corporate website explains:
“We’re investing in facilities and technologies that allow us to manufacture the most cutting-edge machines and equipment to keep up with the ever-evolving business of farming. In fact, over the past few years, every one of our factories around the world has benefited from a significant investment in both our people and systems.
“Tireless research and development. Significant capital investments in technology. Forward-thinking people. They’re the things we focus on every single day to be as innovative as possible. They’re the reasons AGCO is leading the agricultural revolution by helping growers be more productive, efficient and profitable.
“AGCO’s deep experience, long heritage and broad dealer network give us the ability to inherently know our customers’ needs more than others. But we don’t stop there. Building on constant feedback from customers, our designers work closely with suppliers, agronomists and research institutions to create solutions that make a real difference in the field and on the bottom line.
“From hybrid combine harvesters to telemetry-based tracking systems (and so much in between!), AGCO’s innovative approaches are helping make more productive farms—and helping make the world a better, more sustainable place,” the site underlines.
In December 2014, the Board of AGCO sanctioned the repurchase of shares worth up to $500 million, effective through Dec 31, 2016. AGCO’s shares went up 4 per cent on the announcement.
In Jul 2012, AGCO’s board of directors had approved a share repurchase program under which the company can repurchase up to $50 million worth of its common stock. This program does not have an expiration date. The new share repurchase program reflects AGCO’s healthy cash flow generation and long-term strength. It is also in sync with the company’s commitment to increase shareholder value through continuous investment in business.
As the AGCO name reaches its quarter century, it continues to go from strength to strength.