(Reuters) -Agricultural machinery maker AGCO Corp said on Thursday it would acquire an 85% stake in GPS navigation products maker Trimble’s agribusiness for $2.0 billion in cash.
Shares of Trimble, whose agribusiness offers software and cloud-based applications that help farmers in all aspects of the crop cycle, rose 4.3% to $51.34 in premarket trading.
The stake acquisition is expected to boost AGCO’s “precision agriculture” portfolio, with the company benefiting from Trimble’s technology for maximizing crop production.
“The precision agriculture approach uses computer technology and the global positioning system to ensure that seeds, fertilizer and chemicals are applied correctly,” AGCO Chief Executive Eric Hansotia said.
The purchase price represents an implied enterprise value of about $2.35 billion for the business, AGCO said.
AGCO, which will place its grain and protein business under a strategic review as it seeks to transform its portfolio, has secured $2.0 billion in fully committed bridge financing from Morgan Stanley for the transaction.
Morgan Stanley & Co is acting as the financial adviser to AGCO, while Centerview Partners is the financial adviser to Trimble for the deal, expected to close in the first half of 2024.
(Reporting by Kannaki Deka in BengaluruEditing by Vinay Dwivedi)
