Kubota purchases control of Kverneland

[HayDR]

MAJOR KVERNELAND SHAREHOLDER SELLS ITS STOCK TO KUBOTA
Dec. 23, 2011

Farm Equipment magazine reports:

The major shareholder of Kverneland, the Norwegian maker of farming implements, has reportedly sold its shares to Kubota, giving the Japanese tractor maker the upper hand in acquiring control of the firm.

Umoe, the investment group founded by Jens Ulltveit-Moe, chairman of Kverneland, sold its 31.8% share to Kubota, the Japanese tractor maker, for NOK10.50 a share, or $276 million. This was NOK2.00 higher than Kubota originally offered last Friday. CNH Global and Chery Heavy Industries of China had offered NOK9.50 to Kverneland shareholders.

Published reports also say that Kverneland stopped further due diligence efforts by CNH and Chery.

Reportedly, Kverneland said, "As a consequence of the agreement between Kubota and Umoe, Kverneland has decided to terminate the due diligence processes being conducted by CNH Global and Chery Heavy Industry with immediate effect."

AgriMarketing.com - Major Kverneland Shareholder Sells Its Stock To Kubota

 

[HayDR]

Does this mean Kubota will purchase Vermeer Ag or is Kubota going to dissolve the Kubota/Vermeer deal?

 

[JasG]

So many changes have been happening in ag it's hard to say. I don't see why it would affect the Vermeer deal. Vermeer is mostly hay equipment where Kverneland group I believe sold part of the Taarup brand to Kuhn (I think, too hard to keep track) which had a better rep than Vicon or Kverneland does for hay and forage. Although they just came out with a mower line that has Taarup in the name. Yet a Kuhn dealer told that the new Kuhn balers were from a purchase of Taarup from Kverneland group and Taarup is no longer listed as a group.

If Kubota wants a tillage line, or to force a deal like they have with landpride and vermeer you can't find better plows than these IMO.


I'm kind of surprised they would do this with ag being such a limited market. I would think Kubota would do much better expanding it's construction lines.

 

[MessickFarmEqu]

I'm kind of surprised they would do this with ag being such a limited market. I would think Kubota would do much better expanding it's construction lines.

The size of the construction market has gotten much smaller as of late. Its also tough to ship big equipment (you should see how they cram a KX080 in a container) They've been eyeing the AG market for awhile. The product is not quite up to par with CNH, but they have been making steps in that direction. One of the prior press releases said Europe was the focus, so its possible Vermeer may stay and we might not see any new equipment.


CNH was working on a rotary rake with Kverneland, it will be interesting to see what happens to that.

 

[JasG]

The size of the construction market has gotten much smaller as of late. Its also tough to ship big equipment (you should see how they cram a KX080 in a container) They've been eyeing the AG market for awhile. The product is not quite up to par with CNH, but they have been making steps in that direction. One of the prior press releases said Europe was the focus, so its possible Vermeer may stay and we might not see any new equipment.


CNH was working on a rotary rake with Kverneland, it will be interesting to see what happens to that.

Actually construction in the US has slowed down, world wide it is still doing well. Mainly in developing countries. Cat and Deere have been having good sales overseas and so have others. I would think they could expand on the skidsteer line and the compact loaders they have.

The biggest problem with Ag IMO is the trend going on for decades here and in Europe. Fewer larger farms with much larger equipment. Also the trend to get away from tillage, or the kind of tillage Kvernland is a big player in.

IMO it is going to make it and up hill battle for Kubota to get into implements. The tractors on the other hand seem to be doing Ok around here. I have actually seen several on farms. When I helped a friend 8 years ago decide on a tractor for his operation it came down to Kubota and Deere. At the last minute the Deere dealer put together a package that was just enough to beat out the Kubota.

I do hope they do well, only time will tell.

 

[JasG]

Another thing I wonder about. Deere was putting kverneland mouldboards on some of there plows. Although Deere has been phasing out that type of plow and I don't know if they still use it.

 

[Hoosier Hay Man]

It could be a move by Kubota to have a full line of tillage equipment to help sell tractors in China. They are aligning their currency with China and plan a trade pact with China and South Korea. China is hungary for ag equipment.
I was talking to a domestic planter manufacture who had a 600 planter order from China. He said he could only get them 300. He visited and saw huge machinery sheds full of new machinery. He said his visit was an eye opener. Some is being produced there as Deere, CNH and AGCO have been and are still building new plants there. World wide AG is in a boom. Kubota may have made a good move going deeper into ag.
The trend in China is moving from hand labor to more mechanized. There farms are made of co-ops depended on hand labor. With jobs in the city, many young people are leaving the farms. Some of the co-ops are 1,000,000 acres. They may have 100,000 members which equals 10 acres per family. They are needing equipment as they are having a labor shortage on the farm.
Overall Kvernland is a quality company and good move by Kubota to be a serios ag player.

 

[DAY]

MSNBC's David Faber reported just a few minutes ago that 300 to 400 million Chinese are moving from rural China to cities. Largest migration in world history, and a LOT fewer field hands! Mechanization has to fill the void.
I wonder if all those "Made in China" tractors we have been buying will be staying home instead.
Is this an opportunity for a North American manufactured (like GM/Ford cars) tractor to fill the void?