John Deere recently announced it will be acquiring the Wirtgen Group, a leading manufacturer of road construction equipment.
During an investor presentation on June 1, John Deere noted that the Wirtgen acquisition provided Deere with “greater exposure to transportation infrastructure, a faster growing, less cyclical sector than broader construction”
Additional benefits outlined by Deere on the investor call cited global distribution options, enhanced emerging market capabilities, and improved strategic position for the Construction & Forestry division.
A benefit that was not noted, but would stand to reason would be valuable, is reducing John Deere’s significant agricultural industry reliance from 79% to 70%.
Considering the volatility and current depressed state of the agricultural equipment market, investment in the more stable transportation industry comes at a good time.
Customers will also be able to leverage John Deere’s WorkSite Solutions for a connected work site throughout the entire road construction process for potential productivity gains.