Editors’ Blog

Deere execs weigh in on adding the Wirtgen Group

By |  June 1, 2017

Max Guinn

A deal such as John Deere’s $5.2 billion acquisition of the Wirtgen Group sparks a number of intriguing questions.

For starters, what drove John Deere to pursue this opportunity? How about the handling of the Wirtgen brands? And what does the future hold for the two companies?

Max Guinn, president of John Deere’s worldwide Construction & Forestry Division, and Domenic Ruccolo, senior vice president of sales and marketing for the division, offer some clarity, discussing the transaction and what it means for John Deere and the Wirtgen Group.

How did this transaction come about?

Guinn: Deere has respected the Wirtgen Group for a long time. The Wirtgen Group’s products and employees have a superb reputation and strong customer relationships. This is similar to John Deere. We have been interested in the Wirtgen Group for years and when the Wirtgen family was interested in finding a partner and ensuring a continued future for the Wirtgen Group, we came together immediately. We believe our companies have similar values and both want to serve customers with high-quality products in the heavy equipment industry.

Domenic Ruccolo

Will all equipment now be branded as John Deere?

Ruccolo: The employees of the Wirtgen Group have worked very hard for many years to earn customer loyalty to the premium brands that are part of the company. Deere plans to maintain the Wirtgen Group’s existing brands, management, manufacturing footprint, employees and distribution network.

How does the Wirtgen Group fit into John Deere’s organization?

Guinn: The Wirtgen Group will be part of Deere’s worldwide Construction & Forestry Division but it will continue to operate much as it does today. By joining forces with the Wirtgen Group, Deere is showing a significant commitment to the road construction business. The Wirtgen Group’s leadership of this industry segment has been well earned through its high-quality products and exceptional customer service.

How will the Wirtgen Group benefit from joining forces with John Deere?

Guinn: The Wirtgen Group is a high-quality business with exceptional intellectual property, engineering, manufacturing, customer support and brand image. Opportunities to join forces with a significant market-leading company are not common. There are opportunities for the combined company to benefit from the purchasing of direct materials such as steel, investment in research and development, and in other areas such as machine technologies and enhanced operations.

Ruccolo: It is rare that two companies can join forces and not have any product overlap. While John Deere makes earthmoving equipment that is used on road construction worksites, the Wirtgen Group completes the process in this segment of the overall construction industry with a full line of products for road construction. Deere considers construction equipment to be one of its two global growth businesses, so it is a natural fit to add a highly complementary business to our existing Construction & Forestry Division.

Do you have a vision for the future in this industry?

Ruccolo: Spending in the area of transportation infrastructure is expected to continue growing all around the world. In fact, it is likely that it will grow faster than the construction industry overall. Deere’s strategic plan is driven by several macro trends and one of them is the rapid urbanization that is taking place worldwide. As the Wirtgen Group and John Deere join forces, we will be well positioned to help meet the need for contractors building and rehabilitating highways, roads and other construction projects.

Information for this article courtesy of the Wirtgen Group.

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