AGCO, a Georgia-based agricultural equipment manufacturer and distributor, is to acquire the design, assembly and marketing of the new MT Series of Caterpillar’s Challenger farm tractors.
‘This agreement enables us to focus our efforts on those areas where we can add the highest value – engines, drive-trains, electronics and technology development – while AGCO provides its expertise in the assembly and marketing of agricultural products. It also offers Caterpillar the opportunity to provide additional engines and other components to AGCO,’ said Robert Macier, vice president of Caterpillar.
Macier noted that Caterpillar already is a major engine supplier to AGCO, which is one of the largest customers of Caterpillar’s Perkins Engines division.
AGCO has a full agricultural product line that is sold throughout the world under brands that include Massey Ferguson and Fendt.
Under the agreement, AGCO will immediately begin assembly of four models of the newly announced MT700 series of Challenger tractors. It also calls for Caterpillar to be a long-term supplier of high-horsepower (220-500 hp) diesel engines, drivetrains, and other major components, including the company’s patented Mobil-trac system. This agreement also includes future MT Series tractors.
AGCO will acquire the MT Series product design, and will continue to market the tractors through Caterpillar dealers world-wide, as well as through a selected network of AGCO dealers. Caterpillar will provide technical support to AGCO on track technology and will maintain customer support services for all Challenger tractors produced prior to the sale of the MT Series to AGCO.
The parties have agreed not to disclose financial terms of the transaction, which is expected to close in the first quarter of 2002.
In conjunction with this transaction, Caterpillar will take a pre-tax charge of about $80 million.