Kubota Looks For Different Ways To Expand Globally

Kubota Corp. is seeking partnerships with rival tractor makers to expand in the U.S. and Europe, after saying in January it would consider spending $2.4 billion on acquisitions, Bloomberg reports.

“M&A isn’t the only way to go,” Kubota President Yasuo Masumoto said last week in an interview in Tokyo. “We can still collaborate” with overseas farm equipment makers without resorting to takeovers, he said.

Kubota, Japan’s largest tractor maker, hasn’t found any suitable foreign company ready to sell all or part of its operations, Masumoto said. The Osaka-based company will seek partnerships to secure a supply of large tractors used to plow bigger fields that grow wheat and corn.

“Rice paddies account for only about 25 percent of agricultural land worldwide” and the rest is for dry cultivation, Masumoto said. By expanding the product line beyond rice-farming equipment, “we aim to become known as a ‘global’ farm equipment maker,” he said.

The company may ask overseas manufacturers to supply large tractors to be sold under the Kubota brand and offer its own products for sale abroad under other names, he said, without identifying potential partners. It would take five to 10 years to independently develop tractors as powerful as 200 horsepower, Masumoto said. The company’s biggest model is 135 horsepower.

The company, which in December offered 1.3 billion kroner ($230 million) to buy Norwegian farm-equipment maker Kverneland ASA, continues to pursue overseas purchases.

The company is also focusing on its water and environmental-related business, Masumoto said. Sales from the water and environmental systems and social infrastructure divisions, he said.