Deere & Company has signed an agreement to acquire the Wirtgen Group, a leading global manufacturer in the road construction industry based in Windhagen, Germany.

Deere plans to maintain the Wirtgen Group’s existing brands, management, manufacturing footprint, employees and distribution network. The combined business is expected to benefit from sharing best practices in distribution, customer support, manufacturing and technology as well as in scale and efficiency of operations.

The Wirtgen Group has five premium brands with market-leading positions across the entire road construction segment spanning processing, mixing, paving, compaction and rehabilitation. The Group has more than 8,000 employees and sells products in more than 100 countries.

Stefan Wirtgen, managing partner at Wirtgen said, “The Wirtgen Group has a legacy of technology and innovation with market-leading products and a strong focus on the customer. As we looked to the future, we specifically chose Deere as the buyer because of our long-held respect for the organisation and our full confidence that Deere is dedicated to the ongoing success of the Wirtgen Group and our employees worldwide.”

Jürgen Wirtgen, managing partner at Wirtgen added, “Our company’s strength and success comes from dedicated employees, who are focused on helping customers succeed in the road construction industry. We believe this transaction allows the company to be successful well into the future - independent of our family ownership.”

Samuel R. Allen, chairman and CEO of Deere & Company said, “The Wirtgen Group’s superb reputation, strong customer relationships and demonstrated financial performance are attractive as Deere expands its reach in construction equipment to more customers, markets and geographies.”

Max Guinn, president of Deere’s construction and forestry division commented, “The Wirtgen Group strengthens Deere’s strong position in the construction equipment industry, enhances our ability to serve customers across the globe and improves Deere’s competitive position through the addition of market-leading products.”

Mr Guinn said that spending on road construction and transportation projects has grown at a faster rate than the overall construction industry and tends to be less cyclical. He added there is recognition globally that infrastructure improvements must be a priority and roads and highways are among the most critical in need of repair and replacement.

The transaction is subject to regulatory approval in several jurisdictions. The companies said they expect to close on the transaction in the fourth quarter of the 2017 calendar year.