In an effort to expand its influence in the precision agriculture equipment sector, CNH industrial announced Monday that it is in the process of buying South Dakota-based Raven Industries for $2.1 billion.

According to a release, CNH Industrial — the equipment company that oversees the CASE IH, New Holland Agriculture and Steyr brands — obtained 100% of the capital stock in Raven Industries for $58 per share. The acquisition is expected to create approximately $400 million of run-rate revenue synergies by 2025.

“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,” Scott Wine, the chief executive officer for CNH Industrial, said in a release. “This acquisition emphasizes our commitment to enhance our precision farming portfolio and aligns with our digital transformation strategy.”

The deal could be an attempt by CNH to keep up with its competitors in the precision ag industry. John Deere’s production and precision ag division reported an operating margin of 21.7% in the first quarter of 2021, while CNH Industrial’s agriculture division posted a margin of 13.1%.

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One of Raven Industries’ three divisions is focused on developing precision agriculture technology, while the other two specialize in engineered films and aerospace.

“For 65 years, our company has been committed to solving great challenges,” Dan Rykhus, president and chief executive officer of Raven Industries, said in the release. “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.”

The deal still requires approval of Raven shareholders and regulatory approvals; it is expected to close in the fourth quarter of 2021.

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