Farmer Iron

Farm Equipment Acquisition Fight is Under Way

Kverneland, the Norwegian farm implement maker is in the midst of a battle between two companies that want ownership - CNH and Kubota.

Now here's an end-of-the-year story I didn't expect to see. Two major farm equipment makers are battling over ownership of Norwegian farm equipment maker Kverneland ASA. On Monday, CNH Global confirmed it sent an indication of interest for a voluntary tender offer for 100% of Kverneland USA outstanding shares for about $246 million - at NOK9.50 per share. The actual launch of the offer is pending due diligence.

But a rival bidder popped up. Kubota Corp. of Japan - according to Dow Jones - has made arrangements with Kverneland shareholder Umoe AS to buy 31.8% of Kverneland for NOK10.50 per share - and Kubota offered the same higher rate for the remaining Kverneland shares.

The CNH bid was a non-binding offer, but according to Dow Jones the U.S. owner of Case IH and New Holland may make a counter offer.

Kverneland, long known for its quality niche products from manure handling tools to forage-making equipment, is also owner of the Vicon brand of equipment. Like many European manufacturers the company has majority shareholders. Kubota's end-around move to get shares from Umoe means that even if CNH were successful in bidding for the rest of Kverneland, Kubota would remain a minority shareholder.

Kubota says it will send an tender offer to all Kverneland shareholders early in January.

It's been awhile since the farm equipment acquisition business was hot. Agco's earlier move to buy GSI just after the Farm Progress Show was a start. There are other deals out there pending, that's what happens when big firms are flush with cash and looking for ways to grow beyond their "organic" efforts. Acquiring customers through purchasing companies is an efficient management move.

For farmers, the key is knowing that the equipment you've come to trust is going to be available. We'll see if that remains true.

Either way, it looks like 2012 is going to be an interesting ride.

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