Dutch dairy equipment manufacturer Lely, best known in the Canadian market for its robotic milking systems, plans to focus on that business and sell its forage equipment lines to Agco.
The two companies announced Monday they have an agreement in principle for Lely to sell its forage division, including two German manufacturing plants, to U.S.-based Agco for an undisclosed sum.
Lely said Monday it expects the deal will allow it “to fully concentrate on the dairy segment, the development of milking robots and other innovations for increasing the efficiency sustainability and animal welfare on dairy farms.”
The deal is expected to cost some jobs at Lely’s facilities at its home base of Maassluis, west of Rotterdam, where it makes its milking equipment as well as its forage division’s mowers, tedders and rakes.
Those lines of forage equipment “overlap” with Agco’s range of products, Lely said, so it expects production of that equipment to be “reduced after sale,” then discontinued by the end of March next year.
All employees as Maassluis will remain with Lely, the company said, while about 95 will be temporarily seconded to Agco. “After that, a solution will be sought for their future inside or outside the company,” Lely said.
Lely’s German manufacturing plants at Wolfenbuttel and Waldstetten, which make balers and loader wagons respectively, would go to Agco in this deal and those plants’ employees would join Agco, the company said.
“The sale of (the division) offers these employees a chance of a better future with a company that fully concentrates on the manufacture of tractors and agricultural machinery,” Gijs Scholman, Lely’s vice-president for sales, said in that company’s release.
Lely and Agco said Monday their deal is subject to regulatory approval and is expected to close in the fourth quarter of 2017. In the meantime, Lely added, “the process for employee consultation will now be started.”
Lely’s milking equipment production would remain at Maassluis and at other Lely plants in Germany and Iowa, the company said. — AGCanada.com Network