Mumbai: Chennai-based Tractors and Farm Equipment Ltd ( TAFE) and US agricultural machinery manufacturer AGCO Corporation, which were locked in a legal dispute over the use of the latter's tractor brand Massey Ferguson in India, have reached a settlement. The deal brings curtains down on the year-long legal dispute.
The two companies announced a comprehensive resolution covering brand ownership, commercial arrangements and shareholding. Under the terms of the settlement, TAFE will become the sole and exclusive owner of the Massey Ferguson brand in India, Nepal and Bhutan, including all associated rights, trademarks and goodwill, according to a joint statement released by the companies on Tuesday.
TAFE will repurchase AGCO’s 20.7% stake in the company for $260 million, making it a wholly owned subsidiary of the Amalgamations Group, a Chennai-based diversified industrial conglomerate. AGCO, in turn, will exit its equity holding in TAFE.
TAFE will retain a 16.3% ownership stake in AGCO and has committed not to exceed this limit. It will also participate in AGCO’s future share buybacks to maintain its proportional holding, subject to certain exceptions. Additionally, TAFE will support AGCO’s board recommendations at shareholder meetings, with limited exemptions.
All existing commercial agreements between the two will be terminated. However, TAFE will continue to honour outstanding supply orders and provide parts for agreed markets. All legal proceedings—including three suits currently pending before the Madras High Court over the Massey Ferguson brand—will be unconditionally withdrawn. A consent decree will be sought to formally close the cases.
The agreement will take effect upon completion of necessary regulatory and procedural formalities in India related to the share repurchase.
The relationship between TAFE and AGCO has spanned over six decades, during which time Massey Ferguson has become a well-recognised name in Indian agriculture. TAFE, the second-largest tractor manufacturer in India after Mahindra & Mahindra, sells more than 180,000 tractors annually, including over 100,000 Massey Ferguson tractors produced in India. Its products are exported to more than 80 countries.
“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 chairman and managing director Mallika Srinivasan said.
The two companies announced a comprehensive resolution covering brand ownership, commercial arrangements and shareholding. Under the terms of the settlement, TAFE will become the sole and exclusive owner of the Massey Ferguson brand in India, Nepal and Bhutan, including all associated rights, trademarks and goodwill, according to a joint statement released by the companies on Tuesday.
TAFE will repurchase AGCO’s 20.7% stake in the company for $260 million, making it a wholly owned subsidiary of the Amalgamations Group, a Chennai-based diversified industrial conglomerate. AGCO, in turn, will exit its equity holding in TAFE.
TAFE will retain a 16.3% ownership stake in AGCO and has committed not to exceed this limit. It will also participate in AGCO’s future share buybacks to maintain its proportional holding, subject to certain exceptions. Additionally, TAFE will support AGCO’s board recommendations at shareholder meetings, with limited exemptions.
All existing commercial agreements between the two will be terminated. However, TAFE will continue to honour outstanding supply orders and provide parts for agreed markets. All legal proceedings—including three suits currently pending before the Madras High Court over the Massey Ferguson brand—will be unconditionally withdrawn. A consent decree will be sought to formally close the cases.
The agreement will take effect upon completion of necessary regulatory and procedural formalities in India related to the share repurchase.
The relationship between TAFE and AGCO has spanned over six decades, during which time Massey Ferguson has become a well-recognised name in Indian agriculture. TAFE, the second-largest tractor manufacturer in India after Mahindra & Mahindra, sells more than 180,000 tractors annually, including over 100,000 Massey Ferguson tractors produced in India. Its products are exported to more than 80 countries.
“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 chairman and managing director Mallika Srinivasan said.
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