TAFE, AGCO reach settlement on brand rights, commercial, shareholding

The Hindu

2 days ago

Tractors and Farm Equipment Ltd. (TAFE ) and NYSE-listed AGCO Corporation said they had reached comprehensive settlement covering brand rights, commercials and shareholding.
As per the settlement, the ownership of Massey Ferguson brand will rest with TAFE as the sole and exclusive owner for India, Nepal and Bhutan, including all rights, title and interest in 'Massey Ferguson' and related trademarks and all goodwill associated therewith.
TAFE has agreed to buy back AGCO's shares in TAFE which amounts to 20.7% of TAFE's equity for a consideration of $260 million thereby making TAFE a wholly owned subsidiary of the Chennai based Amalgamations Group.
Besides this TAFE will retain its shareholding in AGCO at an ownership level of 16.3%, and not exceed it, while participating in AGCO's future buyback programmes to maintain its proportionate ownership subject to certain exceptions.
TAFE has agreed to support AGCO by voting in its favour all recommendations of AGCO's board of directors at shareholder meetings, subject to certain exemptions and will remain a long-term investor in AGCO through planned periodic interactions with AGCO leadership.
'While all commercial agreements between TAFE and AGCO will be mutually terminated; TAFE will honour outstanding supply orders and continue to supply parts for all markets on agreed terms,' both the companies said.
'All ongoing legal proceedings will be irrevocably and unconditionally withdrawn. A consent decree will be sought in the three suits relating to Massey Ferguson brand-currently pending before the Madras High Court in India,' they said.
'The agreements will become effective upon the completion by AGCO and TAFE of certain governmental and other processes in India relating to the repurchase of the shares held by AGCO in TAFE,' they added.
Mallika Srinivasan, Chairman & Managing Director - TAFE in a statement said, 'As we step into a new era in TAFE's growth story, we recognise and cherish the long partnership we've had with AGCO, and continue to support AGCO as an engaged shareholder.'
'TAFE and Massey Ferguson have been synonymous in the minds of the Indian customers for over 65 years. We re-dedicate our commitment to transformation of Indian agriculture through our innovative products, solutions and service to the farming community in India,' she added.
'We are pleased to have reached an amicable resolution with TAFE on all outstanding commercial, governance and shareholding matters,' said Eric Hansotia, AGCO's Chairman, President and CEO in a statement.
'We appreciate the TAFE relationship for its years as a commercial partner and continued support as a shareholder. AGCO's Board and management team are fully focused on our Farmer-First strategy, which we believe will improve outcomes for farmers, drive operational success for our company and deliver strong returns for shareholders,' he added.