AGCO Corporation (‘AGCO’) is a global leader in the design, manufacture, and distribution of agricultural machinery and precision agriculture technology.
The company delivers value to farmers and original equipment manufacturer (‘OEM’) customers through its differentiated brand portfolio, including leading brands Fendt, Massey Ferguson, PTx, and Valtra. The company’s full line of equipment, smart farming solutions, and services helps farmers sustainably feed the world. The company distributes m...
AGCO Corporation (‘AGCO’) is a global leader in the design, manufacture, and distribution of agricultural machinery and precision agriculture technology.
The company delivers value to farmers and original equipment manufacturer (‘OEM’) customers through its differentiated brand portfolio, including leading brands Fendt, Massey Ferguson, PTx, and Valtra. The company’s full line of equipment, smart farming solutions, and services helps farmers sustainably feed the world. The company distributes most of its products through approximately 2,700 independent dealers and distributors in approximately 140 countries. The company also provides retail and wholesale financing through its finance joint ventures with Coöperatieve Rabobank U.A., which, together with its affiliates, it refers to as ‘Rabobank.’ In 2024, the company fundamentally shifted its portfolio through the PTx Trimble joint venture and the divestiture of the majority of its Grain & Protein (‘G&P’) business.
On April 1, 2024, pursuant to the terms of an Amended and Restated Sale and Contribution Agreement among AGCO, Trimble, and PTx Trimble (the ‘Joint Venture’), AGCO and Trimble completed the contribution by Trimble to the Joint Venture of Trimble’s OneAg business, which is Trimble’s agricultural business, excluding certain Global Navigation Satellite System and guidance technologies; the contribution by AGCO to the Joint Venture of its interest in JCA Industries, LLC d/b/a JCA Technologies; and the purchase by AGCO from Trimble of membership interests in the Joint Venture in exchange for the payment by AGCO to Trimble. Immediately following the closing and as a result of the transaction, AGCO directly and indirectly owns an 85% interest in the Joint Venture and Trimble owns a 15% interest in the Joint Venture. AGCO began consolidating PTx Trimble within its consolidated financial statements on April 1, 2024. PTx Trimble creates a global-leading mixed-fleet precision agriculture platform. The company is the exclusive provider of the comprehensive technology offering, supporting the future development and distribution of next-generation agriculture technologies, allowing the company to offer a wide variety of user-friendly technologies compatible across brands, equipment models and farm types. The acquired hardware, software and cloud-based applications span all aspects of the crop cycle, from land preparation to planting and seeding to harvest.
On July 25, 2024, the company entered into a Stock and Asset Purchase Agreement to sell the majority of its G&P business, which includes the GSI, Automated Production (AP), Cumberland, Cimbria, and Tecno brands. On November 1, 2024, the company completed the sale of its G&P business to A-AG Holdco Limited, an affiliate of American Industrial Partners. The divestiture of the G&P business aligns with AGCO's efforts to better position itself for high margin growth and allows for AGCO to better streamline and focus on its portfolio of agricultural machinery and precision ag technology products.
Products
The following sets forth a description of the company’s more significant products and their percentage of net sales:
Tractors
High horsepower tractors (140 to 650 horsepower); typically used on acreage farms, primarily for row crop production, soil cultivation, planting, land leveling, seeding, and commercial hay operations.
Utility or Mid-range tractors (40 to 130 horsepower); typically used on small and medium-sized farms and in specialty agricultural industries, including dairy, livestock, orchards, and vineyards.
Compact tractors (under 40 horsepower); typically used on small farms and specialty agricultural industries, as well as for landscaping, equestrian, and residential uses.
Combines: Combines, sold with a variety of threshing technologies and complemented by a variety of crop-harvesting heads; typically used in harvesting grain crops, such as corn, wheat, soybeans, and rice.
Hay Tools and Forage Equipment, Planters, Implements & Other Equipment
Round and rectangular balers, loader wagons, self-propelled windrowers, forage harvesters, disc mowers, spreaders, rakes, tedders, and mower conditioners; used for the harvesting and packaging of vegetative feeds used in the cattle, dairy, horse, and renewable fuel industries.
Planters and other planting equipment (including retrofit equipment); used to plant seeds and apply fertilizer in the field, typically used for row crops, including planting technologies that cover the areas of monitoring and measurement, liquid control and delivery, meter accuracy, and seed delivery.
Implements, including disc harrows, which cut through crop residue, leveling seed beds and mixing chemicals with the soils; heavy tillage, which breaks up soil and mixes crop residue into topsoil, with or without prior discing; field cultivators, which prepare a smooth seed bed and destroy weeds; and drills, which are primarily used for small grain seeding.
Other equipment, including loaders; used for a variety of tasks, including lifting and transporting hay crops.
Application Equipment
Self-propelled, three and four-wheeled vehicles and related equipment; for use in the application of liquid and dry fertilizers and crop protection chemicals both prior to planting crops (‘pre-emergence’) and after crops emerge from the ground (‘post-emergence’).
Replacement Parts
Replacement parts for all of the products the company sells, including products no longer in production. Most of its products can be economically maintained with parts and service for a period of 10 to 20 years. The company’s parts inventories are maintained and distributed through a network of master and regional warehouses throughout North America, South America, Europe, Africa, China and Australia in order to provide timely response to customer demand for replacement parts.
Grain Storage and Protein Production Systems
Grain storage bins and related drying and handling equipment systems; seed-processing systems; swine and poultry feed storage and delivery, ventilation, and watering systems; egg production systems; and broiler production equipment.
Precision Agriculture
In 2024, the company launched PTx, a new brand representing its precision ag portfolio. PTx combines precision ag technologies from the cornerstones of AGCO's tech stack: Precision Planting and its newest joint venture, PTx Trimble. AGCO's PTx technologies enable farmers who use almost any brand to increase profitability and sustainability. With retrofit, factory-fit, and OEM solutions that work across mixed fleets, the company helps transform farmers' equipment into smarter, more efficient machines. The company’s PTx solutions provide retrofit solutions to upgrade farmers’ existing equipment to improve their planting, fertilizer, pesticide, and herbicide application, and harvest operations, resulting in yield and cost optimization. The company provides telemetry-based fleet management tools, including remote monitoring and diagnostics, which help farmers improve uptime, machine and yield optimization, mixed fleet optimization, and decision support, with critical data privacy choices and convenient mobile tools that offer access to data and information. These products ultimately result in improved yields or reduced waste, as well as increased profitability for farmers to help enable sustainable farming. In addition, the company’s precision agriculture solutions are based on connectivity, automation, and digitalization and include satellite-based steering, field data collection, product self-adjustment, and yield mapping. PTx sells precision agriculture solutions around the crop cycle to third-party original equipment manufacturers (‘OEMs’) and supports its products, brands, and the aftermarket with a comprehensive and customizable suite of solutions, enabling farmers to make individual, data-based decisions in order to maximize efficiency, yields, and profitability. These technologies are developed internally or sourced from third parties and integrated into the company’s products. These products and related devices are highly valued by farmers globally and are integral to the growth of its equipment sales and revenues. The PTx Trimble Joint Venture, which closed on April 1, 2024, complements and enhances AGCO’s existing precision agriculture portfolio to deliver even more solutions across the crop cycle by creating a mixed-fleet precision agriculture platform. By combining these two precision agriculture portfolios, the company is positioned to drive outsized growth and better provide next-generation technologies to even more farmers around the world.
Competition
The company’s two principal competitors on a worldwide basis are Deere & Company and CNH Industrial N.V.
Marketing and Distribution
Dealers and Distributors
The company distributes products primarily through a network of independent dealers and distributors. Its dealers are responsible for retail sales of equipment to end users and after-sales service and support. The company’s distributors may sell its product through networks of dealers supported by the distributors, and its distributors also may directly market its products and provide customer service support. The company’s sales are not dependent on any specific dealer, distributor or group of dealers. In some countries, the company utilizes associates and licensees to provide a distribution channel for its products and a source of low-cost production for certain products.
Dealer Support and Supervision
The company supports its dealers in order to improve the quality of its dealer network. In 2024, the company announced the launch of FarmerCore, a global initiative to deliver a next-generation farmer and dealer experience built on three pillars: the on-farm mindset, smart network coverage, and digital engagement. FarmerCore will be implemented in close partnership with AGCO’s global dealer network. The program launched this year in select North and South America dealer organizations, with continued expansion expected throughout 2025. The company monitors each dealer’s performance and profitability and establishes programs that focus on continuous dealer improvement. Its dealers generally have sales territories for which they are responsible.
The company’s ability to offer its dealers a full product line of agricultural machines and precision agriculture technology, as well as its digital tools to support the dealer’s sales, marketing, warranty and servicing efforts, helps ensure the vitality and increases the competitiveness of the company dealer network. The company also maintains dealer advisory groups to obtain dealer feedback on its operations.
The company provides its dealers with volume sales incentives, demonstration programs and other advertising support to assist sales. The company designs its sales programs, including retail financing incentives, and its policies for maintaining parts and service availability with extensive product warranties to enhance its dealers’ competitive position.
Resources
Manufacturing and Assembly
The company manufactures and assembles its products globally. Its locations are intended to optimize capacity. The company balances its manufacturing resources with externally-sourced machinery, components, and/or replacement parts to enable it to better control costs, inventory levels, and its supply of components. The company’s manufacturing facilities are sufficient to meet its needs for the foreseeable future.
The company’s AGCO Power division produces diesel engines, gears, and generating sets. The diesel engines are manufactured for use in a majority of its tractors, combines, and sprayers; and also are sold to third parties. AGCO Power specializes in the manufacturing of off-road engines in the 75 to 500 horsepower range.
Components and Third-Party Suppliers
The company externally sources some of its machinery, components, and replacement parts from third-party suppliers. Its production strategy is intended to optimize its research and development and capital investment requirements and to allow it greater flexibility to respond to changes in market conditions.
The company purchases some fully manufactured tractors from Tractors and Farm Equipment Limited (‘TAFE’), Carraro S.p.A., and Iseki & Company, Limited. It also purchases other tractors, implements, and hay and forage equipment from various third-party suppliers. On April 26, 2024, the company gave notice to TAFE that it was terminating all of its commercial relationships with TAFE.
In addition to the purchase of machinery, third-party suppliers supply the company with significant components used in its manufacturing operations. The company selects third-party suppliers that are high quality and possess the most appropriate technology.
The company also assists in the development of these products or component parts based upon its own design requirements. Its past experience with outside suppliers has generally been favorable, although in the past, it experienced supply chain disruptions for several key components, such as semiconductors. These supply chain disruptions eased and improved in 2024.
Engineering, Research, and Innovation
Through AGCO Ventures, the company sources and funds new technologies to drive and support farmers worldwide. This initiative actively connects its business needs with industry and market perspectives to identify investment opportunities in startup companies, corporate venture funds, incubators, accelerators, higher education, and research institutions. AGCO Ventures supports the accelerated development of critical capabilities and competencies across three strategic areas: information management and analytics, agriculture technology, and environmental and alternative fuel sources.
Wholesale Financing, Sales Terms, and Accounts Receivable Sales Agreement
Primarily in the United States and Canada, the company engages in the standard industry practice of providing dealers with floor plan payment terms for their inventories of farm equipment for extended periods, generally through its AGCO Finance joint ventures. The terms of its wholesale finance agreements with its dealers vary by region and product line, with fixed payment schedules on all sales, generally ranging from one to 12 months. In the United States and Canada, dealers typically are not required to make an initial down payment, and the company’s terms allow for an interest-free period generally ranging from one to 12 months, depending on the product. Amounts due from sales to dealers in the United States and Canada are immediately due upon a retail sale of the underlying equipment by the dealer. In limited circumstances, the company provides sales terms, and in some cases interest-free periods, that are longer than 12 months for certain products. These typically are specified programs, predominantly in the United States and Canada, where interest is charged after a period of up to 24 months, depending on various factors, including dealers’ sales volumes during the preceding year. The company generally obtains a security interest in the new and used equipment it finances.
Sales terms outside the United States and Canada are typically of a shorter duration, generally ranging from 30 to 180 days. In many cases, the company retains a security interest in the equipment sold on extended terms. In certain international markets, its sales are often backed by letters of credit or credit insurance.
The company has accounts receivable sales agreements that permit transferring, on an ongoing basis, a majority of its wholesale receivables in North America, Europe, and Brazil to its AGCO Finance joint ventures in the United States, Canada, Europe, and Brazil. Upon transfer, the wholesale receivables maintain standard payment terms, including required regular principal payments on amounts outstanding and interest charges at market rates. The company also sells certain trade receivables under factoring arrangements to other third-party financial institutions around the world, and it accounts for the sale of such receivables as off-balance sheet transactions.
Retail Financing
The company’s AGCO Finance joint ventures offer financing to most of the end users of its products. Besides contributing to its overall profitability, the AGCO Finance joint ventures enhance the company’s sales efforts by tailoring retail finance programs to prevailing market conditions. The company’s AGCO Finance joint ventures provide both retail financing and wholesale financing to its dealers in the United States, Canada, Europe, Brazil, Argentina, and Australia. AGCO owns a 49% interest in the joint ventures, with the remaining interests owned by a wholly-owned subsidiary of Rabobank. The majority of the assets of the finance joint ventures consist of finance receivables. The majority of the liabilities consist of notes payable and accrued interest. Under the various joint venture agreements, Rabobank provides financing to the AGCO finance joint ventures, primarily through lines of credit. The company does not guarantee the debt obligations of the joint ventures. In the United States and Canada, the company guarantees certain minimum residual values to those joint ventures upon expiration of certain eligible operating leases between the finance joint ventures and end users. It also has other guarantees with its other finance joint ventures.
In addition, Rabobank is the primary lender with respect to the company’s credit facility, its senior term loan, and its term loan facility.
Seasonality
To the extent possible, the company attempts to ship products to its dealers and distributors on a level basis throughout the year to reduce the effect of seasonal retail demands on its manufacturing operations and to minimize its investment in inventory. Its financing requirements are subject to variations due to seasonal changes in working capital levels, which typically increase in the first half of the year and then decrease in the second half of the year (year ended December 31, 2024). The fourth quarter is also typically a period for higher retail sales because of its customers’ year-end tax planning considerations, the increase in the availability of funds from completed harvests, and the timing of dealer incentives. The company’s net sales and income from operations historically have been the lowest in the first quarter and have increased in subsequent quarters.
Research and Development
The company’s research and development expenses totaled approximately $381.3 million for the year ended December 31, 2024.
Environmental Regulations
The engines manufactured by the company’s AGCO Power division, which specializes in manufacturing off-road engines in the 75 to 500 horsepower range, currently comply with emissions standards and related requirements set by European, Brazilian, and the U.S. regulatory authorities, including both the United States Environmental Protection Agency and various state authorities.
History
AGCO Corporation was founded in 1990. The company was incorporated in Delaware in 1991.
