Chennai- Tractors and Farm Equipment Limited., (TAFE) a manufacturer of tractors and agricultural machinery, announced today that it has reached a comprehensive settlement with AGCO Corporation. The resolution addresses all matters relating to brand ownership, commercial arrangements, and shareholding between the two companies.
As part of the settlement, TAFE will assume sole and exclusive ownership of the Massey Ferguson brand in India, Nepal, and Bhutan. This includes all rights, title, interest, and associated goodwill related to the Massey Ferguson name and trademarks within these territories.
In addition, TAFE will buy back AGCO’s 20.7% equity stake in the company for a consideration of USD 260 million. Following this transaction, TAFE will become a wholly-owned subsidiary of the Amalgamations Group, a diversified industrial conglomerate headquartered in Chennai.
TAFE will continue to hold a 16.3% ownership stake in AGCO but has agreed not to exceed this level. The company will also participate in AGCO’s future share buyback programs to maintain this proportionate ownership, subject to specific exceptions.
As part of the agreement, TAFE has committed to voting its AGCO shares in favor of all Board of Directors’ recommendations at shareholder meetings, with certain exemptions. TAFE will also continue as a long-term investor in AGCO, engaging in regular, planned interactions with AGCO’s leadership.
While all existing commercial agreements between the two companies will be mutually terminated, TAFE will fulfill all outstanding supply orders and continue to provide parts to various markets on agreed terms.
Additionally, all ongoing legal proceedings between TAFE and AGCO will be irrevocably and unconditionally withdrawn. A consent decree will also be sought in the three lawsuits related to the Massey Ferguson brand currently pending before the Madras High Court.
The agreements will take effect once AGCO and TAFE complete the necessary governmental and regulatory processes in India regarding the share repurchase.
Ms. Mallika Srinivasan, Chairman & Managing Director - TAFE, said, “As we step into a new era in TAFE’s growth story, we recognize 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. As we move towards our vision of ‘Cultivating the World’, we are confident of delivering exceptional value to all our stakeholders.”
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