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Lely plans to sell forage business to Agco

Following a strategic reorganisation, Lely has decided to sell its forage division, allowing it to fully concentrate on its dairy technology business.


James   Rickard

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The proposed Lely deal could see Agco gain a large line-up of forage equipment including forage wagons.

Agco has announced it has reached an agreement in principle to acquire the forage division of the Lely Group.

 

Famous for its robotic milking machines, Lely’s intended sale of its forage business will allow it to fully concentrate on its dairy business, it says. Subject to regulatory approval the deal is expected to be completed towards the end of this year.

 

In the deal, Agco will get all Lely forage equipment and several manufacturing facilities. However, several products including mowers, rakes and tedders, overlap with Agco’s current portfolio. According to Lely, this will initially see production of these machines reduced, at its factory in Maassluis, The Netherlands, with complete discontinuation of manufacturing of these products at the end of March next year.

 

This leaves baling, forage harvester and forage wagon equipment, produced at two factories in Germany, to be absorbed into Agco’s line-up.

 

Martin Richenhagen, Agco’s chairman, president and chief executive officer says; “The integration of Lely’s hay and forage technology will further strengthen Agco’s full line product offering.”

With Lely's intention to sell its forage division, it will allow the company to concentrate on its dairy technology business.

Branding-wise, round balers, wrappers and baler-wrapper combos will all be made available under the MF, Fendt and Lely brands. For small square balers and trailed forage harvesters, MF and Lely will be the dedicated brands and channels. For forage wagons Fendt and Lely are intended to be the dedicated brands and channels.

 

During brand migration Agco says it is going to work with the Lely dealers one-by-one to understand the best solutions for them and the markets.

 

The family business Lely had, until now, focused on two different product categories and markets with its dairy and forage business units. Chief executive officer, Alexander van der Lely explains; “Lely intends to focus entirely on its role as innovator in the field of robotisation, and sensor and data systems for use on dairy farms. 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.”

 

The production of Lely dairy technology will stay in Maassluis, (The Netherlands), Pella (Unites States) and Leer (Germany).

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