Tractor-maker TAFE ends long-running dispute with AGCO, secures exclusive Massey Ferguson brand rights in India

Chennai-based Tractors and Farm Equipment Limited (TAFE) has ended its long-standing dispute over the ‘Massey Ferguson’ brand rights and a host of other issues with the US-based AGCO Corporation through a comprehensive settlement agreed upon by both parties.

All ongoing legal proceedings between TAFE and AGCO will be irrevocably and unconditionally withdrawn. A consent decree will be sought in the three suits relating to the Massey Ferguson brand—currently pending before the Madras High Court, TAFE said in a statement.

As part of the settlement, ownership of the ‘Massey Ferguson’ brand will rest with TAFE as the sole and exclusive owner for India, Nepal, and Bhutan. TAFE will buy back AGCO’s shares in TAFE, amounting to 20.7% of TAFE’s equity, for $260 million. The settlement also allows TAFE to retain its shareholding in AGCO at an ownership level of 16.3%, and not exceed it, TAFE said in a statement. The settlement requires TAFE to support AGCO by voting its shares in favour of all the recommendations of AGCO’s Board of Directors at shareholder meetings, subject to certain exemptions.

"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."

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. “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,” Mallika Srinivasan, chairman and managing director of TAFE, said.

TAFE and Massey Ferguson have been synonymous in the minds of Indian customers for over 65 years. We re-dedicate our commitment to the 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,” she added.

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.