TAFE To Buy Out American Partner AGCO’s 20.7% Stake For $260 Mn

After 65 years, this tractor company will be a fully Indian organization. Chennai-based Tractors and Farm Equipment Ltd. (TAFE) will buy out its partner AGCO Corporation of the U.S. in the company.  The American firm has 20.7% in TAFE. This will be bought for a consideration of $260 million. The two were engaged in a legal fight over Massey Ferguson brand.  The two have now hammered out a comprehensive out-of-court settlement that is sure to bring the curtain down on the spat between the two. Though TAFE holds 16.3% in AGCO, it has decided to stay out of the board and remain a long-term investor. Significantly enough, this comprehensive agreement confirms TAFE as the sole owner of the iconic Massey Ferguson brand in India and two other countries. Two things emerge out of this agreement. For one, it makes TAFE a wholly-owned subsidiary of the Amalgamation group, a 100% Indian firm at that. For another, the decision to stay out of AGCO board gives TAFE the leeway to chart its own business strategy in the international marketplace. Well, the agreement should do a world of good to both TAFE and AGCO.