John Deere squeezed leasing – Finance – Kommersant

The Insight Group has acquired John Deere Financial, the Russian leasing subsidiary of the American agricultural equipment manufacturer John Deere. This is the second foreign captive leasing company bought by the investment group. Now it is entering a new segment, which has been the least affected by the crisis so far – leasing of agricultural machinery. And although earlier it was assumed that the company would focus on the development of Siemens Finance and equipment leasing, now investors plan to cost the leasing holding and declare their readiness for new purchases.

Insight Investment Group acquired the leasing company John Deere Financial. This is evidenced by the entry in the Unified State Register of Legal Entities. John Deere Financial is a subsidiary of an American manufacturer of equipment for agriculture, construction and logging that stopped working in Russia amid sanctions. Information about the deal was confirmed by a representative of Insight.

Insight refused to disclose the details of the deal. According to Siemens reporting for 2022, the concern sold Siemens Finance (Insight investment group) for 52 billion rubles. (€922 million), and on the eve of the transaction, Insight placed bonds in the amount of 53 billion rubles. On the eve of the second transaction at the end of February, Insight placed bonds for 11 billion rubles.

When Insight acquired Siemens Finance (now Deltalizing) in September 2022, market participants agreed that the group was likely to focus on equipment leasing.

“Our goal is to build a leasing holding that will bring together leasing companies with different competencies. Consistently following this strategy, we acquired John Deere Financial and do not rule out other transactions in this market,” said a representative of Insight in connection with the latest acquisition.

The group stressed that there are no plans to merge Deltalizing and John Deere Financial.

The company’s interest in entering the agricultural machinery leasing segment is understandable. “The leasing segment of agricultural machinery and equipment suffered less than others from the departure of foreign companies. This is due to the fact that traditionally agricultural engineering has been developed in Russia, and last year domestic companies managed to quickly replace imports and significantly expand the volume of manufactured equipment,” says Tatyana Antipova, Deputy General Director of Rosagroleasing. According to her, John Deere Financial held no more than 10% of the total leasing portfolio of the agricultural machinery segment and 13% of new business in the segment, while it was a captive, financing mainly purchases from the parent company.

In 2022, the company leased about 60 units of equipment, 9 times less than in 2021, Ms. Antipova notes.

Deliveries were only in January and February, so the company’s portfolio will decrease over time, the expert notes.

The investment group said that they plan to retain and strengthen the team of the new company. Also, Insight stressed that John Deere Financial “has a diversified leasing portfolio.” Whether the company actually has the objects of leasing in physical presence, the buyers did not specify.

Previously, experts and market participants pointed out that such transactions are more about acquiring not assets, but a team and competencies. “Companies with foreign participation during 2022 practically did not conclude new transactions. However, the purchase of such companies is primarily interesting due to the presence of a proven customer base with a high proportion of repeat customers and good payment discipline. At the same time, these lessors are the owners of mainly foreign property, which has now risen in price significantly due to its shortage in the market,” says Zoya Sovetkina, director of banking ratings at Expert RA.

John Deere Financial did not promptly respond to Kommersant’s request.

Polina Trifonova