UPDATE 3-CNH Industrial in $2.1 bln deal to buy Raven Industries
* CNH to pay $58 per share, offering a 33.6% premium
* Proposed acquisition marks CNH's largest M&A deal
* Deal expected to close in Q4 this year
* CNH to spin off truck, bus, engine business in early 2022 (Adds share performance, analyst comment)
MILAN, June 21 (Reuters) - CNH Industrial has agreed a deal to buy Raven Industries to strengthen its position in the agricultural equipment business as the Italian-American vehicle maker prepares to spin off its truck, bus and engine operations.
CNH Industrial will pay $58 per share for the U.S. agriculture technology company, a 33.6% premium to Raven's four-week volume-weighted average stock price, giving it an enterprise value of $2.1 billion, the companies said on Monday.
"Precision agriculture and autonomy are critical components of our strategy," CNH Industrial Chief Executive Scott Wine said in a statement.
Analysts at Bestinver Securities said the news was positive as Raven Industries' "cutting-edge" technology in the agriculture industry would further enhance CNH Industrial capabilities in that market.
"However, we point out that the acquisition came at cost," they said in a note after Milan-listed shares in CNH Industrial fell as much as 5.6% at opening.
The shares later trimmed losses and by 0810 GMT they were down 1.2%.
CNH Industrial is the world's second largest agricultural equipment maker - a business where it operates through the New Holland, Case IH and Steyr brands - after John Deere.
The group has said it would complete early next year a plan to spin off and separately list its lower-margin Iveco truck and bus units along with its FPT engine division, to boost asset values and streamline its businesses.
The proposed acquisition, which marks the largest M&A deal for CNH Industrial since the group was formed in 2013, requires approval from Raven's shareholders. It is expected to close in the fourth quarter and will be funded with CNH's available cash, the companies said in a joint statement.
It is expected to generate around $400 million of run-rate revenue synergies by 2025, resulting in $150 million of incremental core profits (earnings before interest, taxes, depreciation and amortisation), they added.
CNH Industrial, which is controlled by Exor, the holding company of Italy's Agnelli family, said it did not expect the proposed acquisition to have any impact on its financial forecasts for this year, including cash flow.
Barclays and Goldman Sachs were financial advisors to CNH Industrial in the deal, while J.P. Morgan Securities advised Raven Industries. (Reporting by Giulio Piovaccari in Milan, Kanishka Singh in Bengaluru; Editing by Kim Coghill, David Goodman and Emelia Sithole-Matarise)
