DULUTH, Ga. — AGCO Corporation today announced it has entered into a set of agreements with Tractors and Farm Equipment Limited (“TAFE”). Theagreements resolve all outstanding disputes and other matters related to the commercial relationship between AGCO and TAFE as well as TAFE's shareholding in AGCO, ownership and use of the Massey Ferguson brand in India and certain other countries, and other key governance issues between the parties.

Key commercial terms of the agreements include:

  • All commercial agreements between AGCO and TAFE will be terminated, with agreed wind-down provisions.
  • Ownership of the "Massey Ferguson" brand will rest with TAFE on an exclusive basis in India, Nepal and Bhutan.
  • All ongoing legal proceedings will be terminated.

Key governance and shareholding terms of the agreements include:

  • TAFE has agreed to participate in future share repurchase programs that AGCO executes but retains the right to maintain but not exceed its current ownership level of 16.3%.
  • TAFE has agreed to customary provisions governing its shareholding in AGCO, including voting its shares in accordance with the recommendations of AGCO's Board of Directors on all proposals at AGCO's shareholder meetings, subject to certain agreed limited exceptions.
  • Parties have agreed to mutual non-disparagement and TAFE not engaging in public activism.
  • TAFE will no longer be entitled to nominate a representative to the AGCO Board of Directors and AGCO's Director on TAFE's Board will step down.
  • TAFE will repurchase AGCO's current shareholding in TAFE for an aggregate amount of $260 million, subject to compliance with applicable law.

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.

"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. "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."

Mallika Srinivasan, chairman & managing director of 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.”

The agreements will be filed by AGCO with the U.S. Securities and Exchange Commission.

Related Content

Click here for more Industry News.