TAFE & AGCO Settle Legal Dispute over Massey Ferguson Brand in India
Chennai-based Tractors and Farm Equipment (
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 the curtains down on the year-long legal dispute.
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 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 All legal proceedings will be unconditionally withdrawn.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.
According to legal sources, Sudarshan Venu of TVS Motor, and Haigreve Khaitan, senior partner at Khaitan & Co, played a key role in the outcome.
The relationship between TAFE and AGCO spans over six decades. During this 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. 'We are pleased to have reached an amicable resolution with TAFE on all outstanding commercial, governance, and shareholding matters,' said Eric Hansotia, chairman and CEO, AGCO.
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