In 1918, two prominent firms R Hornsby & Sons Ltd of Grantham (1828) and Ruston, Proctor & Co Ltd of Lincoln (1889) merged to form Ruston & Hornsby Ltd. The company made a wide range of agricultural machinery and steam, oil and gas engines. The company diversified into excavating machines, cranes, and steam locomotives, but still had substantial agricultural engineering interests in 1918.

Ruston largely moved out of the agricultural machinery market in 1919, when it transferred its agricultural interests to have a controlling interest in Ransomes, Sims & Jeffries Ltd. However, it still produced agricultural machinery at its Grantham works and attempted post-war diversification in the form of the motor car, furniture, and petrol-driven tractors.

In 1940, Ruston & Hornsby purchased Davey Paxman & Co (Colchester) to form the Ruston – Paxman Group. In 1962 Ruston & Hornsby purchased the Birmingham firm of Alfred Wiseman & Co Ltd., gear specialists and maker of industrial locomotive and marine gear boxes. Some of the Wiseman design and production was transferred to R&H’s Grantham factory. However the Grantham factory was closed shortly afterwards, in 1963. In November 1966, the English Electric Co Ltd acquired Ruston & Hornsby Ltd which formed part of English Electric Diesels Ltd in January 1968 which headed the production of Dorman, Kelvin, Ruston, Paxman, Napier and English Electric diesels.