Starting with an overture from Kubota, to be by CNH, the owners of Case and New Holland and then followed by another bid offer from the Chinese Chery Heavy Industries company.
On Friday of last week, Kubota, the Japanese tractor maker, offered Kverneland share holders a deal of 8.50NOK (€1.10) per share forth entire company that was excess of the company’s previous day share closing price.
The Kubota offer valued Kverneland at €168m. The board of directors of Kverneland recommended the offer as it was accepted by Umoe Shipping and Energy AS, the majority shareholder in the Kverneland company.
On Monday of this week, CNH announced that it was offering to pay a higher9.50NOK (€1.23) per share for the Norwegian company. This valued the Kverneland at €188m.
CNH and Kverneland had recently formed an agreement in October of this year to allow CNH to distribute some of the Kverneland range of machinery, mainly mowers and rakes through New Holland dealers in North America.
By close of business on Monday, enter the third bidder for the Kverneland business. The Chinese-based Chery Heavy Industries, which was formed as recently as 2010 came in with news that it intended to make an offer for Kverneland.
The Kverneland Group owns the Vicon brand. The present Kverneland range is the combination of the Accord, Kverneland, Rau and Taarup brands from the past.
The company makes ploughs, fertilizer spreaders, seed drills, mowing and balers and crop sprayers. Kverneland sold its Dutch-based baler manufacturing operations to Kuhn in 2008 and, last year, came back into the baler business when it took a39% share in the Italian baler company Gallignani.
Kverneland reported improved results in its third quarter figures recently released. Operating revenues at Kverneland increased by21% from third quarter 2010to third quarter 2011.
Kverneland has been well established on the European market. The company was founded in 1879 and is based out of Norway with close to 2,500 employees.
Kubota has an equally long history. It was founded in Japan in 1890 and has a workforce of 25,400 employees across a number of countries. Kubota makes tractors, engines and smaller construction machines as well as a host of non-farming or construction machinery.
Kubota is reported to have had revenues of over €9bn for its last financial year to the end of March his year. The cost of the Kverneland takeover is not considered a huge amount for Kubota; the offer figure is reported to represent less than a third of last year’s net income. The benefit for Kubota is that it is buying an asset in a foreign currency with a strong yen, which has appreciated 45%against the Norwegian krone over the past five years.
It is also buying into a strong farm machinery brand for a very attractive price.CNH, the Dutch-based owner of the Case and New Holland machinery brands, is majority owned by Fiat Industrial. It is the second largest tractor and farm machinery company in the world after John Deere.
NET SALES
CNH has reported a 30% increase in net sales for its most recent financial quarter ended 30 September, 2011.The company reported revenues of $4.6bn as agricultural equipment markets continued to perform well. CNH reported an operating profit of $460m for the period.
The final player is Chery Heavy Industries, which was formed in 2010.The company has three manufacturing bases in China making tractors up to about 150hp in colours and designs that are similar to the Claas tractor range.
Chery has stated that its overall strategic aim is to develop into a famous equipment manufacturer in China by 2015; to become a world famous equipment manufacturer by 2020 with sustainable development capability as the leading international equipment company.