U.S. machinery maker Deere & Co. (NYSE: DE) announced Thursday morning that the company has signed a definitive agreement to purchase privately held Wirtgen Group in an all-cash transaction valued at about $5.2 billion, including the assumption of Wirtgen’s debt. The cash portion of the deal is valued at around $4.89 billion.

According to Deere, Wirtgen’s 2016 sales totaled €2.6 billion and the U.S. firm expects the acquisition to add to its earnings per share. The company said it plans to finance the acquisition with a combination of cash and new debt.

Wirtgen is an international firm with more than 8,000 employees that sells its road construction equipment in more than 100 countries. In a presentation for investors at its website, Deere said that Wirtgen “delivers a complementary product line and enhances global presence” for the company’s construction & forestry segment, elevating Deere to a “global top-3 player.”

Max Guinn, president of Deere’s construction and forestry division, said:

This transaction enhances our global distribution options in construction equipment and enhances our capabilities in emerging markets. Spending on road construction and transportation projects has grown at a faster rate than the overall construction industry and tends to be less cyclical. There is recognition globally that infrastructure improvements must be a priority and roads and highways are among the most critical in need of repair and replacement.

Deere said it would maintain Wirtgen’s existing brands, management, manufacturing footprint, employees and distribution network.

The acquisition has been approved by Deere’s board of directors and is subject to regulatory approval in several jurisdictions, along with other customary closing conditions. The company expects the transaction to close in Deere’s first quarter of fiscal 2018.

Deere plans to finance the deal with fiscal year 2017 cash generation, along with a loan repayment from the company’s financial division and up to $1 billion in equipment operations. Deere said it expects to maintain a mid-single “A” rating using this financing structure.

Deere’s stock traded up about 3.5% in Thursday’s premarket session to $126.73, a new 52-week high if it holds through the opening bell. The current 52-week range is $76.73 to $123.59, and the consensus price target according to MarketWatch is $127.05.

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