TAFE, one of the world’s largest manufacturers of tractors and farm equipment, announced today that a comprehensive settlement and resolution has been reached with AGCO on all matters relating to brand, commercial issues and shareholding.
The settlement encompasses the following key features:
- 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 will buy back AGCO’s shares in TAFE which amounts to 20.7% of TAFE’s equity for a consideration of $260 Mn thereby making TAFE a wholly owned subsidiary of the Amalgamations Group, a diversified industrial conglomerate, headquartered in Chennai, India.
- 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 programs to maintain its proportionate ownership subject to certain exceptions.
- TAFE will support AGCO by voting of its shares in favor of all the recommendations of AGCO’s Board of Directors at shareholder meetings, subject to certain exemptions.
- TAFE 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.
- All ongoing legal proceedings will be irrevocably and unconditionally withdrawn.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.
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.
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.”
She added that, “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.”