CNH Industrial to Acquire Raven for $2.1 Billion

Scott Wine, CEO of CNH Industrial said in the announcement: “Precision agriculture and autonomy are critical components of our strategy to help our agricultural customers reach the next level of productivity and to unlock the true potential of their operations.” 
Scott Wine, CEO of CNH Industrial said in the announcement: “Precision agriculture and autonomy are critical components of our strategy to help our agricultural customers reach the next level of productivity and to unlock the true potential of their operations.” 
(Darrel Smith)

Announced first thing Monday morning in Europe (and at midnight stateside), CNH Industrial revealed it will acquire Raven Industries in a $2.1 billion deal. 

Scott Wine, CEO of CNH Industrial said on a follow up conference call after the announcement, "this will be a milestone in CNH Industrial's digital transformation." He also said acquiring Raven provides a "perfect strategic fit for the ag segment." 

The acquisition was announced after what was described as a 3+ month process which involved competitive bidding. Wine said he sees this as a "straight down the middle" regulatory approval with anti-trust issues because the space has a lot of players and OEMs have bought precision ag companies before. 

Raven’s business is divided into three groups: applied technology (precision ag), engineered films, Aerostar (aerospace). The applied technology division has annual revenues of $165 million, accounting for 40% of the company's revenue, and the group has been making a lot of news around automation including its acquisitions of SmartAg, DOT and JayBridge Robotics. 

CNH Industrial has previously had technology partnerships with Raven and other providers (including Trimble.) CNH's purchases from Raven had accounted for 30% of its precision ag division revenues. Wine noted he sees the business working to continue to have relationships with other OEMs. 

Wine said in the official announcement: “Precision agriculture and autonomy are critical components of our strategy to help our agricultural customers reach the next level of productivity and to unlock the true potential of their operations.” 

He continued, “Raven has been a pioneer in precision agriculture for decades, and their deep product experience, customer driven software expertise and engineering acumen offer a significant boost to our capabilities. This acquisition emphasizes our commitment to enhance our precision farming portfolio and aligns with our digital transformation strategy. The combination of Raven’s technologies and CNH Industrial’s strong current and new product portfolio will provide our customers with novel, connected technologies, allowing them to be more productive and efficient.”

During the conference call Wine emphasized how investments in its digital business are part of a long-term strategy citing three aspects of this acquisition to position CNH Industrial as a leader in precision ag, notably with application control and autonomous solutions: 

  1. Depth of knowledge, capabilities and expertise to accelerate strategy
  2. Differentiates from peers
  3. Improves competitive position

Wine said this acquisition will help grow capabilities faster than either company could have done independently and CNH will be able to "jump the curve in a competitive environment." And he referenced how a greater share of future value will come from precision ag and autonomy compared with the legacy machinery business. "It's crucial to own these capabilities," he said.

In citing visits with CNH dealers, Wine asked about their perception of Raven, including the company's largest dealer Titan Machinery, which is an established Raven dealer. He cited "extremely positive" dealership perceptions. 

He shared a vision for the Sioux Falls, South Dakota headquarters of Raven to become a "tech hub" for CNH Industrial. And he sees much more innovation faster from the team as they are now part of an OEM and will be integrated with the technical teams of CNH Industrial. 

Regarding the industrial films and aerospace divisions that have been acquired, Wine said there's no rush to divest those adjacent businesses. He said there's a lot of value to extract from those businesses with no need for a "fire sale" but rather a strategic review of each. 

CNH Industrial was formed in 2013. This is the largest acquisition for the company since that founding. CNH Industrial’s brands include Case IH, New Holland and Steyr (a brand used outside of North America). 

The deal requires approval by Raven shareholders, and it’s expected to close at the end of the fourth quarter. 

“Our Board and Management are excited about this partnership and what it means for our future,” Dan Rykhus, President & Chief Executive Officer for Raven Industries said in the announcement. “For 65 years, our company has been committed to solving great challenges. Part of that commitment includes delivering groundbreaking innovation by developing and investing in our core capabilities and technology. By coming together with CNH Industrial, we believe we will further accelerate that path as well as bring tremendous opportunities and value to our customers — once again fulfilling our purpose to solve great challenges. Our relationship with CNH Industrial has expanded over decades, and we have a deep respect for one another and a shared commitment to transform agriculture practices across the world. We look forward to CNH Industrial leveraging the Raven talent and culture, as well as the Sioux Falls community, as part of their vision and future success.”

This story will updated with more information as it’s available. 
 

 

Latest News

Where Did All the Corn Acres and Principal Crop Acres Go? The Two Biggest Questions from USDA's Big Prospective Plantings Report
Where Did All the Corn Acres and Principal Crop Acres Go? The Two Biggest Questions from USDA's Big Prospective Plantings Report

USDA says farmers intend to plant 90 million acres of corn this year, which is lower than the trade expected prior to USDA's big Prospective Plantings report.

Vestaron and Simplot Announce Distribution Agreement
Vestaron and Simplot Announce Distribution Agreement

The distribution agreement focuses on Vestaron’s Spear Lep insecticide, which is a peptide-based control method meant to provide growers with a more environmentally friendly alternative to traditional chemicals.

The Scoop Podcast: How To Gear Up For Carbon And Sustainability Programs
The Scoop Podcast: How To Gear Up For Carbon And Sustainability Programs

Tim Hushon, sustainability and technology director at The Mill, details how sustainability factors into their ag retail business and how to partner with farmers on the technology adoption required.

Two Crop Protection Partners Divest Postharvest Solutions Company
Two Crop Protection Partners Divest Postharvest Solutions Company

Sumitomo Chemical and Valent BioSciences have announced Pace International will become part of AgroFresh Solutions.

The Untold Farmer Stories Of Ukraine: Q&A With Howard Buffett
The Untold Farmer Stories Of Ukraine: Q&A With Howard Buffett

Farmer and philanthropist Howard Buffett held a fireside chat during the 2024 Top Producer Summit to share his experiences visiting the front line of Ukraine over the past two years.

Get the Facts Straight on Highly Pathogenic Avian Influenza
Get the Facts Straight on Highly Pathogenic Avian Influenza

Now that the mystery illness impacting some dairy herds has been revealed as the same strain of Highly Pathogenic Avian Influenza that has been impacting the U.S. poultry flock, pork producers are asking questions.