EXHIBIT 99.1
COMPANY NEWS RELEASE
[AGCO LOGO] AGCO Corporation
4205 River Green Parkway Duluth, GA USA 30096-2568
www.agcocorp.com
Telephone 770.813.9200
FOR IMMEDIATE RELEASE
Wednesday, September 10, 2003
CONTACT: Molly Dye or Andy Beck
Vice President, Corporate Relations Senior Vice President and
(770) 813-6044 Chief Financial Officer
(770) 813-6083
AGCO AGREES TO ACQUIRE VALTRA TRACTORS AND
DIESEL ENGINES GLOBAL OPERATIONS
DULUTH, GA - Sept. 10th - AGCO Corporation (NYSE:AG), a worldwide
designer, manufacturer and distributor of agricultural equipment, has agreed to
acquire the business of Valtra Corporation, a Finnish company owned by Kone
Corporation. Valtra is a global tractor and off-road engine manufacturer with
market leadership positions in the Nordic region of Europe and Latin America.
Revenues for the twelve months ended June 30, 2003 were approximately $900
million with operating profits of approximately $65 million. For the full year
of 2002, Valtra achieved a pre-tax operating return on assets in excess of 15%.
The purchase price is 600 million Euros, subject to customary closing
adjustments.
Kone Corporation purchased the prior parent of Valtra, Partek
Corporation, in 2002 and subsequently concluded that the business was no longer
a key strategic business for the enlarged group. By divesting the business, it
was concluded that Valtra could be better aligned within the agricultural
industry and continue to develop its long term growth opportunities.
Valtra's strategy has focused on achieving leading industry
performance in terms of operating margins and asset returns, through its unique
sales and manufacturing processes. In addition, Valtra has expanded its revenue
base to attain a top five global industry position in tractor sales. Valtra's
operations are structured around three divisions: Tractors Europe, Tractors
Latin America, and Diesel Engines. The company has sales offices around the
world.
The Tractor Europe business is the Nordic market leader with an
approximate 30% market share, and the Tractor Latin America division is
currently the number three manufacturer in Brazil. The Diesel Engine division
produces engines, sold under the Sisu Diesel brand, in models ranging from 50
horsepower to 450 horsepower for off-road application. They have been a major
supplier to AGCO, Valtra, and other manufacturers with over 27,000 engines
produced in 2002.
Mr. Robert J. Ratliff, Chairman, President & CEO of AGCO Corporation
commented, "This acquisition provides unequalled opportunity for AGCO to
effectively expand its business in significant global markets by utilizing the
technology and productivity leadership present in this outstanding company. The
manufacturing and distribution techniques employed by Valtra
have established a new standard in the industry and we intend to apply this
knowledge throughout AGCO."
"Further, AGCO is committed to continue to invest in the profitable
growth of Valtra and the full utilization of its facilities. The Valtra brand
and business will be maintained in its current manufacturing locations along
with its strong distribution system throughout the world. The management
organization will be retained to continue the performance which has achieved in
excess of 20% improvement in revenue and operating profits over the last four
years. Such actions continue the AGCO philosophy of multiple brands through
multiple distribution networks, as the markets dictate."
Mr. Ratliff continued, "This transaction continues the role of AGCO as
the industry consolidator and further promotes our objective to provide
technological and productivity advantages to farmers throughout the world. AGCO
also sees this as an opportunity to expand its distribution of other
agricultural products through the Valtra distribution network, thus giving
farmers increased choice in the selection of equipment."
Known for its quality and customized tractors, the tractor factory in
Suolahti, Finland was the first tractor plant to obtain ISO 9000 certification.
Since its origin in the early 1950's Valtra has produced over 500,000 tractors
and has established a strong base of customer loyalty. The Brazilian factory at
Mogi das Cruzes comprises over 630,000 sq ft and has produced over 300,000
tractors since 1960. The engine plant is located at Linnavuori, Finland where
production is split between in-house use and sales to OEM manufacturers.
The transaction is subject to approval by regulatory authorities and
will be consummated as soon as practical.
A webcast conference call regarding the acquisition is scheduled for
2:00 pm, Eastern Time today available on the Company's website at
www.agcocorp.com. A replay of the webcast will also be available on the site
subsequent to the completion of the call.
SAFE HARBOR STATEMENT
This press release contains forward looking statements, including our
expectations that the transaction will provide benefits to AGCO's remaining
operations, our plans for Valtra's facilities, and our expectation that the
transaction will receive the necessary regulatory approvals and be consummated
in a timely manner. Actual results may differ materially from those suggested
by our forward looking statements for various reasons, including the
complexities inherent in integrating a large acquisition into our current
operations, the need to finalize our financing for the transaction, and the
possibility that regulatory authorities will not provide the necessary
approvals or will condition such approvals on either unacceptable or costly
terms. For additional risk factors regarding our business, please see the Form
10-K for the year ended December 31, 2002, that we have filed with the
Securities and Exchange Commission.
* * * * *
AGCO Corporation, headquartered in Duluth, Georgia, is a global
designer, manufacturer and distributor of agricultural equipment and related
replacement parts. AGCO products are distributed in over 140 countries. AGCO
offers a full product line including tractors, combines, hay tools, sprayers,
forage, tillage equipment and implements through more than 8,450
independent dealers and distributors around the world. AGCO products are
distributed under the brand names AGCO(R), AgcoAllis(R), AgcoStar(R),
Ag-Chem(R), Challenger(R), Farmhand(R), Fendt(R), Fieldstar(R), Gleaner(R),
Glencoe(R), Hesston(R), Lor*Al(R), Massey Ferguson(R), New Idea(R), RoGator(R),
Soilteq(TM), Spra-Coupe(R), Sunflower(R), Terra-Gator(R), Tye(R), White(R) and
Willmar(R). AGCO provides retail financing through AGCO Finance in North
America and through Agricredit in the United Kingdom, France, Germany, Ireland,
Spain and Brazil. In 2002, AGCO had net sales of $2.9 billion.
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Please visit our website at www.agcocorp.com.