The race for major manufacturers to broaden their product lineup by buying short-line brands is picking up even more steam.
Mid-autumn, CNH Industrial announced that it was about to bring the Danish Kongskilde implement brand, owned by DLG Group, into its fold under the New Holland brand.
“The acquisition of the tillage and hay and forage activities of Kongskilde adds a key product range that will further broaden New Holland Agriculture’s product offering within the agricultural machinery sector,” said Carlo Lambro, New Holland’s brand president, in an October release.
Read Also
The pros and cons of new technologies
New farm technology hitting the marketplace can be awfully enticing, and it’s not been unheard of in years gone by…
But this was just one example of many through the course of the last few months where a larger brand has gobbled up another equipment firm to expand its own product offering.
Earlier in 2016, John Deere announced its purchase of high-clearance sprayer manufacturer Hagie, saying that it intends to incorporate Hagie sprayers into its own product range while still allowing the brand to sell under its original name, at least in the short term.
And that hasn’t been Deere’s only deal. As far back as November 2015, it announced it was taking over Precision Planting LLC from Monsanto. Although that deal stalled a couple of months ago due to intervention by the U.S. Department of Justice, which alleges the deal would unduly limit competition in the planter industry. Deere is fighting the ruling in court.
In October, Deere also announced that even under its ownership, Precision Planting would still make its technology available to Ag Leader and other brands. That may be a concession to appease regulators so the deal will proceed.
Building on the 2012 purchase of Norwegian implement manufacturer Kverneland, Kubota announced in May it had purchased Kansas-based Great Plains Manufacturing, which produces seeding and tillage equipment. Just like Deere’s Hagie deal, Kubota will allow Great Plains to continue as a stand-alone name for now, while it incorporates the equipment into its own brand offering.
“For the foreseeable future, all five of Great Plains divisions will continue to operate as they have with their infrastructure intact and with respect to the distinctiveness of the brands, trademarks and operational strengths,” said the initial press release from Kubota.
“This acquisition will strengthen our ability to deliver high-quality products to our customers and continue our strategic growth into new markets,” said Kubota Canada president Bob Hickey in the same announcement.
Those “new markets” Hickey that referred to include agriculture, where the brand has declared it eventually wants to be a full-line player.
Now, New Holland’s acquisition of Kongskilde’s “grass and soil activities” allows it to stretch its product line and grow into new market segments as well. Although sister brand Case IH has long had an extensive implement line, NH hasn’t.
The blue brand already has one recent acquisition under its belt that increased its presence in the grains sector, namely the purchase of sprayer manufacturer Miller-St. Nazianz. The Miller design has been integrated into the NH line as the front-boom Guardian sprayer.
NH has long had a solid reputation in the hay and forage equipment sector, but senior management thinks the Kongskilde acquisition will move that further forward too.
“The acquisition of the tillage and hay and forage activities of Kongskilde adds a key product range that will further broaden New Holland Agriculture’s product offering within the agricultural machinery sector,” said Lambro, in the same press release. “In the meantime the Kongskilde dealer and importer network will remain the reference point for their customers. This agreement will provide growth opportunities and create a strong platform to develop the Kongskilde business and its brands, and we will also gradually integrate their products in the New Holland portfolio.”
So, under CNH control, Kongskilde implements will be sold through a much wider distribution network than the Danish firm had on its own.
“We are satisfied that there will be a new strong owner of Kongskilde Agriculture,” said Kim Balle, chairman of Kongskilde and COO of DLG Group. “CNH Industrial will continue to service Kongskilde grass-and-soil customers and end-users, while developing the business further.”
