US firm AGCO calls off Massey Ferguson deal with TAFE

US-based agricultural equipment manufacturer AGCO on Monday terminated its 28-year long deal with Chennai-based Tractors and Farm Equipment Ltd (TAFE), including the brand license for the popular Massey Ferguson tractors, the company said in a statement.

TAFE, the country’s second largest tractor maker, is the biggest shareholder in the $14.4-billion US firm, with a 16.3% stake. TAFE bought the stake in 2012, and became its single largest shareholder and strategic long-term investor.

AGCO’s other top shareholders include institutional investors such as Vanguard and Blackrock, with the top 10 investors having a cumulative stake of 52.8% in the US firm.

The US firm on Monday said it delivered termination notices, with immediate effect, of its Massey Ferguson brand license agreement with TAFE; a distributor agreement with TAFE for India, Nepal and Bhutan; and an intellectual property license agreement with TAFE for India, Nepal, Sri Lanka, Bangladesh and Bhutan.

The terminations “follow inappropriate and unauthorized actions” taken by TAFE that the company believes “breached the various agreements.”

AGCO also has commenced legal proceedings against TAFE in India related to the use of the Massey Ferguson brand following delivery of these termination notices, it said.

The latest termination is in addition to and distinct from the termination notices AGCO had served on TAFE in April over the at-will termination of certain commercial agreements, the company statement said.

Meanwhile, a local Chennai court has ruled in TAFE’s favor with an interim status quo order with respect to the Massey Ferguson brand, the Indian company said in a statement.

“TAFE has asserted its claims over the ownership of the Massey Ferguson brand in a case filed before the Madras high court,” the statement said.

The commercial court in Chennai has ruled in favor of TAFE with an interim status quo order with respect to the Massey Ferguson brand, the company said, adding that “it is therefore impermissible for either party to disturb the position as on 29 April 2024, and any attempt to do so will be violation of the court orders.”

TAFE has filed a petition against AGCO “for disobedience of the orders of the court” in a contempt petition in Chennai, it added.