TAFE and AGCO Reach Settlement on Brand Ownership, Equity, and Commercial Agreements

01 July 2025, Chennai: Tractors and Farm Equipment Limited (TAFE), one of the world’s leading manufacturers of tractors and farm machinery, has announced a comprehensive settlement with AGCO Corporation (NYSE: AGCO), bringing closure to all outstanding issues related to brand ownership, equity holdings, and commercial arrangements between the two companies.

Massey Ferguson Brand Rights to TAFE

As part of the settlement, TAFE will assume sole and exclusive ownership of the Massey Ferguson brand in India, Nepal, and Bhutan. This includes all rights, title, interest, and associated trademarks, along with the goodwill that the brand has cultivated over the past several decades. The agreement cements TAFE’s leadership in these markets under the iconic Massey Ferguson name, a brand that has become deeply entrenched in the agricultural landscape of the region.

Share Buyback Makes TAFE a Wholly Owned Subsidiary of the Amalgamations Group

TAFE will buy back AGCO’s 20.7% equity stake in the company for a consideration of $260 million. Following this transaction, TAFE becomes a wholly owned subsidiary of the Amalgamations Group, a diversified industrial conglomerate headquartered in Chennai. This move consolidates ownership under the Indian group and marks a pivotal moment in TAFE’s independent growth trajectory.

Continued Strategic Investment in AGCO

While AGCO will exit its stake in TAFE, the relationship between the two companies will continue in a redefined manner. TAFE will retain its existing 16.3% stake in AGCO and has agreed not to increase its shareholding beyond this level. However, TAFE may participate in AGCO’s future share buyback programs to maintain its proportional ownership, with certain defined exceptions.

In a further demonstration of its ongoing strategic interest, TAFE has committed to supporting AGCO’s Board of Directors by voting in favor of their recommendations at shareholder meetings, subject to specific exemptions. TAFE will also continue as a long-term investor in AGCO, maintaining planned and regular interactions with AGCO’s leadership.

Commercial Arrangements Conclude, but Commitments Remain

All commercial agreements currently in place between TAFE and AGCO will be mutually terminated as part of the settlement. However, TAFE will honor outstanding supply orders and continue to provide parts for AGCO’s markets on mutually agreed terms. This ensures continuity and support for customers and distributors across various regions during the transition.

Withdrawal of Legal Proceedings

As part of the resolution, all ongoing legal disputes between the two companies will be irrevocably and unconditionally withdrawn. This includes three suits currently before the Madras High Court related to the Massey Ferguson brand, for which a consent decree will be jointly sought. The companies have agreed to bring these matters to a final close in a constructive and amicable manner.

Regulatory Approvals Pending

The agreements will come into effect once all necessary governmental and procedural approvals in India are completed, particularly those relating to AGCO’s share repurchase by TAFE. Both parties are expected to coordinate closely to ensure timely compliance and implementation.

A Renewed Chapter for TAFE

Commenting on the development, Mallika Srinivasan, Chairman and Managing Director of TAFE, stated, “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, “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. As we move toward our vision of ‘Cultivating the World,’ we are confident of delivering exceptional value to all our stakeholders.”

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