Buying tractors

AGCO is to acquire Valtra Corporation, the Finnish tractor and off-road engine manufacturer, from Kone Corporation for 600 million Euros.

Valtra’s revenues for the twelve months ended June 30, 2003 were approximately $900 million with operating profits of approximately $65 million.

Kone Corporation purchased the prior parent of Valtra, Partek Corporation, in 2002, but subsequently concluded that the business was no longer a key strategic business for the group.

Valtra itself has three divisions: Tractors Europe, Tractors Latin America, and Diesel Engines.

The Tractor Europe business is the Nordic market leader with an approximate 30% market share, and the Tractor Latin America division is currently the number three manufacturer in Brazil.

The Diesel Engine division produces engines ranging from 50 horsepower to 450 horsepower for off-road applications that are sold under the Sisu Diesel brand. It has supplied engines to AGCO and Valtra as well as other manufacturers.

The transaction is subject to approval by regulatory authorities.