TAFE retains Massey brand rights

Tractors and Farm Equipment Ltd (TAFE) and US-based AGCO Corp. have settled their dispute over the ownership of the Massey Ferguson brand in India through an out-of-court agreement.

TAFE will now hold exclusive rights to the brand in India, Nepal, and Bhutan. The agreement also covers commercial matters and shareholding between the two companies.

As part of the deal, TAFE will buy back AGCO’s 20.7% stake in its equity for $260 million, making it a wholly owned subsidiary of the Chennai-based Amalgamations Group.

TAFE will continue to hold a 16.3% stake in AGCO but has agreed not to increase it.

Both companies have decided to end all commercial agreements, with TAFE confirming it will honour current supply orders and continue providing parts under agreed terms.

All legal proceedings between the companies will be withdrawn unconditionally.

“As we step into a new era in TAFE’s growth story, we recognise and cherish the long partnership we’ve had with AGCO, and continue to support AGCO as an engaged shareholder,” said Mallika Srinivasan, chairman and managing director, TAFE.

“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 chief executive officer (CEO).

The agreements will take effect once required processes in India are completed.

TAFE will no longer nominate a board member to AGCO, and AGCO’s board representative on TAFE’s board will step down.

TAFE has agreed to vote its AGCO shares as per the board’s recommendations, with certain exceptions, and both parties will avoid making negative public statements about each other.

TAFE began producing Massey Ferguson tractors in India in the 1960s as part of a joint venture with the Amalgamations Group.

A trademark agreement was signed in 1974 and expanded in 1994, giving TAFE exclusive rights to the brand.

TAFE currently produces over 100,000 Massey Ferguson tractors annually out of more than 180,000 total units.

“Massey Ferguson and TAFE have been synonymous in the minds of Indian customers for over 65 years,” said Srinivasan.