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AGCO to Acquire Lely Forage Division
AGCO has entered into an agreement in principle with the Lely Group to acquire its forage division, which manufacturers balers and loader wagons in Europe. Subject to regulatory approval, the deal is expected to close in the final quarter of 2017.
“The integration of Lely’s industry-leading competence in hay and forage technology will further strengthen AGCO’s full line product offering,” says Martin Richenhagen, AGCO’s chairman, president, and chief executive officer.
Lely says the sale of this division will allow it to solely direct its efforts in the dairy industry.
“Lely intends to focus entirely on its role as innovator in the field of robotization and sensor and data systems for use on dairy farms,” says Lely CEO Alexander van der Lely. “Over the last 15 years, these product groups have grown into a successful activity for Lely, with a great deal of potential for the future. Besides the innovative milking robot, other products have also been developed that are primarily based on automation with the aid of robots.”
Effect on jobs
While the production of these technologies will stay in Maassluis (Netherlands), Pella (United States/Iowa), and Leer (Germany), the proposed sale will affect a number of positions within Lely.
- Forage machines manufactured in Maassluis (i.e., mowers, tedders, and rakes) overlap with AGCO’s product line. Therefore, production in Maassluis will be reduced after the sale. Lely anticipates production at Maassluis will be discontinued completely by the end of March 2018. Approximately 95 employees will be affected, and the company is looking at options for their future inside or outside the company.
- The German factories in Wolfenbüttel (balers) and Waldstetten (loader wagons) will become the property of AGCO. Its workers will be employees of AGCO.
- Some of the forage employees of the international Lely Support Organizations (LSOs) will also be employed by AGCO.
“The sale of the forage division offers these employees a chance for a better future with a company that fully concentrates on the manufacture of tractors and agricultural machinery,” says Gijs Scholman, Lely vice president of sales.