AGCO To Divest Majority Of Grain And Protein Business To AIP For $700 Mln In Cash

(RTTNews) - AGCO Corp. (AGCO), a maker of agricultural machinery, announced on Thursday that it has inked a deal to sell the majority of its Grain and Protein business to American Industrial Partners or AIP for $700 million in cash.

The company expects to incur loss on the sale of the business in the range of $450 million to $475 million.

Eric Hansotia, CEO of AGCO, said: "Divesting this business allows us to streamline and sharpen our focus on AGCO's portfolio of award-winning agricultural machinery and precision ag technology products, which underpins a long-term focus on high growth, high margin and high free cash flow generating businesses."

With this, the company will sell its five primary grain and protein brands, including GSI, Automated Production, Cumberland, Cimbria, and Tecno. However, this transaction excludes AGCO's grain and protein business in China.

AGCO expects to use the net proceeds from the transaction, to be closed before the end of this year, to repay debt, invest in technology and organic growth initiatives, and return capital to shareholders.