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Linamar purchases MacDon Industries for $1.2 billion
Linamar purchases MacDon Industries for $1.2 billion

The acquisition is a ‘once-in-a-lifetime’ opportunity says Linamar’s CEO

By Diego Flammini
News Reporter
Farms.com

Guelph, Ont.’s Linamar strengthened its presence in the agricultural sector with yesterday’s announcement of its $1.2 billion acquisition of MacDon Industries.

Linamar’s agricultural division includes Harvestec corn heads in North America and OROS combines in Europe. Linamar owned White Farm Equipment in the 1980s and produced combines for Massey Ferguson as Western Combine in the 1990s.

The company’s acquisition of Winnipeg-based MacDon is part of Linamar’s Vision 2100 – Building an Action Plan for the Future, which includes agriculture as a global addressable market.

The deal also includes MacDon’s manufacturing facilities and network of 1,400 dealers and distributors throughout 40 countries.

Agricultural and industrial equipment account for about 1.2 per cent of Linamar’s total market concentration, according to the organization’s investor presentation in November.

But this type of deal only comes around “once-in-a-lifetime,” and positions Linamar as a future leader in the ag industry, said Linda Hasenfratz, CEO of Linamar.

“We are very excited to announce today what we see as a really important step in our growth and diversification strategy,” she said during a conference call yesterday. “The deal provides us diversification into an opportunistic market and it provides innovation as MacDon is considered an innovative market leader in all of its products.”

Another positive element of the deal is that the exchange took place between two Canadian companies.

In an industry where mergers and acquisitions can be international affairs, the Linamar/MacDon deal shows Canada’s strength in agriculture.

“What we’ve seen in the past couple of years is continued acquisitions within the short-line industry,” Leah Olson, president of Agricultural Manufacturers of Canada, told Farms.com today. “From this perspective, seeing that MacDon will continue to be a Canadian company is really great and speaks well for the company’s products, dealers and the farmers that use the equipment.”