Committed To Long-Term Success!

In the significant development of 180 years old Deere & Company’s history, a new leaf was added on the 1st of June 2017 – the all-cash transaction worth €4.357 billion purchase price of Wirtgen Group’s equity, with the total transaction valued at €4.6 billion includes the assumption of net debt and other consideration.

Germany-based, the Wirtgen Group has five premium brands across the entire road construction sector spanning milling, processing, mixing, paving, compaction and rehabilitation. Wirtgen’s highly complementary product portfolio enhances Deere’s existing construction equipment offering to establish Deere & Company, as an industry leader in global road construction. Wirtgen Group’s 8,000 employees are stationed in more than 100 countries. The company sells its world-class products and services through a large network of company-owned and independent dealers.

“The Wirtgen Group has a legacy of technology and innovation with market-leading products and a strong focus on the customers. As we looked to the future, we specifically chose Deere as the buyer, because of our long-held respect for the organization. Our full confidence, Deere is dedicated to the ongoing success of the Wirtgen Group and our employees worldwide,” stated Stefan Wirtgen, Managing Partner, Wirtgen Group.

“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,” added Jürgen Wirtgen, Managing Partner, Wirtgen Group.
An interview with the Wirtgen Group’s Managing Partners Jürgen and
Stefan Wirtgen:

After 20 years as managing partners, you have decided to sell your company to John Deere, which was an unexpected move. What made you take this step?
When you own a company, at some point you have to ask yourself what will happen to that company after you leave, whether you like it or not. After all, we have a responsibility towards our employees. Our children are simply too young to take on that responsibility. By the time one of them is old enough to take over the leadership, the two of us will be at least 75. We simply have to realize that this is unrealistic.

Did money play a part in the decision?
No, it didn’t! Of course, you don’t pass on your life’s work without a great deal of thought. After all, this company has been the focal point for two generations of our family. We have put our heart and soul into it. But what mattered most to us was ensuring that the Wirtgen Group, along with its employees, would be able to endure over the long term, even when we are no longer active.

Did you consider other options?
Yes, we did! But in the end, we came to the conclusion that it would be best for the Wirtgen Group to have a stable owner, who knows the business, who understands the needs of the employees and customers, and who is fully committed to the company’s long-term success.

How long did the decision process take?
It kept us busy for quite some time. Time and again we weighed up the options and asked ourselves whether our decision would be right for the long term. The specifics then emerged over the last twelve months.

Were there other potential buyers?
Of course! On an average, we received one offer per year.

So why did you make the decision at this particular time?
Right from the start we ruled out numerous interested parties – companies in our own sector, because we didn’t want to sell to competitors, as well as hedge funds and private equity companies, because they couldn’t have guaranteed a secure future for the Wirtgen Group. This considerably lowered the number of suitable candidates, and in the end, John Deere was the one company we wanted to consider. Given the requirements, the timing is not a matter of choice. When John Deere approached us about a year ago and we had our first talks, both sides immediately realized that it was a match.

You say you take a long-term perspective. Are the jobs secured in the long term?
Both of us strongly believe that the integration into John Deere will be fruitful over the long term, securing a stable future for all employees. For this reason, John Deere has given its firm assurance of a job guarantee to all Wirtgen Group employees for the coming years.

Will you keep any shares in the company?
No, we won’t!

Will the Wirtgen Group and its product brands remain independent?
John Deere will build on the
strong name of our five premium
brands and on the steadfast loyalty of our customers. As a result, the companies of the Wirtgen Group will continue to be managed independently to a high degree.

Why did John Deere acquire the Wirtgen Group?
With this acquisition, John Deere wants to further expand its construction division, which will make it a leader not only in the agriculture market, but also in road construction. The integration will also enable John Deere to lend a whole new weight to its construction division and to generate additional growth.

Who is going to take your position in the future?
The two of us will stay at the company until the end of the year. During this period, until the transaction is completed at the end of 2017, our management responsibilities will be passed on to our proven management team. This means Mr. Rainer Otto, Dr.GüntherHähn and Mr. Frank Betzelt will have taken over management of the Wirtgen Group by the end of 2017 and, after this period, will be under the leadership of John Deere’s Domenic Ruccolo.

In what ways can the Wirtgen Group benefit from John Deere?
When two global market leaders work together, the positive effects can be enormous. New opportunities will open up in every field. The product lines of the two companies complement each other perfectly, which will lead to an unprecedented range of customer solutions as well as access to new markets, new groups of customers, and completely new opportunities for collaboration. Take for example the important topic of customer financing, where John Deere has a very strong international position through its own financing company John Deere Finance. In this respect, the Wirtgen Group will benefit especially in markets where our current partner Deutsche Leasing is not yet present.

How has your team reacted so far?
At first, such an unexpected piece of news causes a sense of dismay. That’s not surprising, given the fact that we’ve worked together for so many years. Everyone is influenced by emotions in such moments. But ultimately the entire team has responded, as always, with open-mindedness and courage, and by looking ahead to the future.

How do you see the future of the Wirtgen Group with John Deere?
The path of growth will continue. Anything else would be completely illogical. In the medium term, the Wirtgen Group will generate EUR 4 billion of annual revenue. Thanks to the integration into John Deere, we’re now a global leader in the manufacture of construction machines, not only in terms of market shares, but also in terms of overall company size. Considering that we started out with just one concrete crusher, our “Klöpper,” that’s truly incredible!

What do the Wirtgen Group and John Deere already have in common?
Both companies are global market leaders and 100 % focused on a partnership of trust with their customers. Our guiding principle, “Close to our customers,” will therefore be upheld, while the Wirtgen Group customers will remain the focal point of our team’s thoughts and activities. That’s extremely important to us.

What are your own priorities now?
First, we will ensure an orderly transition. That’s our top priority. Then it will be important to gain some distance. We’d like to catch up on many things we didn’t have time for in the past. Family is first on the list. And of course, we also want to support our mother in continuing her life’s work, the charity group “Kinder in Not,” a foundation for children in need.

Are you going to stay in the region?
Yes, we are! This is our home; this is where we have our roots.
That won’t change.

Can you tell us about the bonus you are planning to pay to the employees?
We are both well aware that not everyone has the opportunity to work with such committed employees to build something as unique as the Wirtgen Group. We’re thankful for this, and it’s especially important to us to thank each one individually for contributing to our shared success with passion, commitment, heart and soul. At the end of this year, we’re therefore going to provide a gross amount in the triple-digit million range, which will be distributed among all 8,000 employees of the Wirtgen Group.

Finally, do you have any advice for your employees?
Both of us have said in our speeches that we’re of the opinion that we have the best team in the industry. We believe this wholeheartedly. So our advice is simply: stay as you are. The company has already changed several times – from a transport business to a service provider, then to a machine manufacturer, and finally to a successful global group. We achieved all this together because the entire team
was always ready for something new and pitched in with conviction. We are both immensely thankful for this and are absolutely certain that this step will drive our company forward and open up new opportunities to all employees.

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