Image Source: AGCO Corporation

AGCO Corporation, a global leader in agricultural machinery and precision ag technology, has announced a comprehensive agreement with Tractors and Farm Equipment Limited (TAFE) that resolves all outstanding disputes between the two companies. The agreements cover critical issues including commercial arrangements, brand rights, governance, and cross-shareholdings.

As part of the agreement, all existing commercial arrangements between AGCO and TAFE will be terminated, with mutually agreed wind-down provisions to ensure an orderly transition. Significantly, ownership of the “Massey Ferguson” brand will rest exclusively with TAFE in India, Nepal, and Bhutan, reinforcing TAFE’s position in the region. All ongoing legal proceedings between the parties will be terminated.

On the governance and shareholding front, TAFE has agreed to participate in AGCO’s future share repurchase programs, while retaining the right to maintain—but not exceed—its current ownership level of 16.3 per cent in AGCO. TAFE will also vote its shares in line with the recommendations of AGCO’s Board of Directors at shareholder meetings, subject to limited exceptions.

Importantly, TAFE will no longer have board representation at AGCO, and AGCO’s designated Director on TAFE’s Board will step down. Both parties have agreed to mutual non-disparagement and TAFE will refrain from engaging in any form of public shareholder activism.

As part of the financial resolution, TAFE will repurchase AGCO’s stake in TAFE for $260 million, subject to the completion of required governmental and regulatory processes in India.

“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 CEO. “We appreciate the TAFE relationship for its years as a commercial partner and its continued support as a shareholder. AGCO’s Board and management remain fully focused on our Farmer-First strategy, which we believe will improve outcomes for farmers, drive operational success, and deliver strong returns for shareholders.”

The agreements will be filed with the U.S. Securities and Exchange Commission (SEC) and will become effective upon completion of the requisite legal and regulatory procedures in India.