TAFE will also have all rights, title and interest in “Massey Ferguson” and related trademarks and all goodwill associated therewith.
This follows a comprehensive agreement between TAFE and AGCO Corporation of the U.S.
The two have been long-standing partners since TAFE was founded six-and-a-half decades ago.
Following the mutual settlement, it has been decided to irrevocably and unconditionally withdraw all ongoing legal proceedings. A consent decree will be sought in the three suits relating to Massey Ferguson brand, currently pending before the Madras High Court.
Significantly enough, the agreement will also see TAFE becoming a wholly-owned subsidiary of the Amalgamation group. For, it provides for TAFE buying out AGCO Corporation in TAFE.
AGCO Corporation holds 20.7% stake in TAFE.
TAFE will buy AGCO shares for a consideration of $260 million.
The settlement covers a whole gamut of contentious issues relating to brand, commercial matters and shareholding.
Retains shares in AGCO
TAFE will retain its shareholding in AGCO at an ownership level of 16.3%. This level will not exceed while participating in any future buy-back programmes of AGCO. The ideas is to maintain its proportionate ownership subject to certain exceptions.
However, TAFE will support AGCO by voting of its shares in favour of all the recommendations of the Board of Directors of AGCO at shareholder meetings, subject, of course, to certain exemptions.
“TAFE will remain a long-term investor in AGCO through planned periodic interactions with AGCO leadership,” said a release.
End of commercial pacts
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.
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.
Enters new era
“As we step into a new era in the growth story of TAFE, we recognize and cherish the long partnership we’ve had with AGCO, and continue to support AGCO as an engaged Shareholder,” said Mallika Srinivasan, Chairman & Managing Director of TAFE.
“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,” she added.