Massey sold to US rival in dollars 328m deal

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The Independent Online
NEW YORK - Makers of agricultural machinery announced two deals yesterday, with Massey Ferguson merging with rival Agco, and Tenneco revealing plans to spin off its Case subsidiary, writes Larry Black.

Agco will pay Varity Corporation dollars 328m ( pounds 226m) for the manufacturing operations of Massey, which is still the world's best-selling tractor brand despite years of financial difficulties. Agco, which emerged out of the 1987 bankruptcy of Allis-Chalmers, had acquired Massey's North American distribution rights in 1991.

The offer, dollars 310m in cash with the rest in shares, topped a reported rival bid from a European group led by John Sword, Massey's former chief executive.

Massey employs 2,400 at its tractor manufacturing plant in Coventry and a further 1,100 in Beauvais, northern France. Agco, based in Georgia, will have sales of dollars 1.5bn, about 20 per cent of the world farm-equipment market.

The Massey sale was overshadowed by the announcement that Tenneco will sell 35 per cent of Case to the public, spinning off the unit as a separate entity. Despite a dollars 1.05bn operating loss as recently as 1992, the stake is expected to raise dollars 450m. Case employs 17,000 worldwide.