AgCO and TAFE have finalized agreements on critical business and other matters.
In a significant development, AGCO Corporation and Tractors and Farm Equipment Limited (TAFE) have announced a comprehensive settlement on July 1, 2025, resolving all outstanding disputes related to their commercial relationship, shareholding, brand ownership, and governance issues. This settlement marks a significant restructuring of their long-standing relationship, spanning over six decades.
### Key Aspects of the Agreement
#### Massey Ferguson Brand Ownership
The most notable change is that TAFE will gain exclusive ownership of the "Massey Ferguson" brand in India, Nepal, and Bhutan. This includes all trademarks and goodwill associated with the brand in these countries. AGCO, in turn, will exit its stake in TAFE related to this brand ownership, selling its shares back to TAFE for a consideration of $260 million. All ongoing legal proceedings, especially those concerning the Massey Ferguson brand disputes pending in courts like the Madras High Court, will be irrevocably withdrawn and terminated.
#### Shareholding and Governance
TAFE will retain a 16.3% ownership stake in AGCO but agrees not to exceed this level, even while participating in any future AGCO share repurchase programs. TAFE has committed to voting its shares in AGCO in alignment with AGCO’s Board recommendations on shareholder proposals, except for certain limited agreed exceptions. As part of governance changes, TAFE will no longer be entitled to nominate a representative on AGCO’s Board of Directors, and conversely, AGCO’s Director on TAFE’s Board will step down. Both parties agreed on mutual non-disparagement clauses and restrictions preventing TAFE from engaging in public activism against AGCO.
#### Commercial Agreements and Legal Proceedings
All existing commercial agreements between AGCO and TAFE will be terminated with agreed wind-down provisions. The settlement ends the commercial partnership and related disputes, creating a clear separation in their business dealings going forward. All ongoing legal proceedings between the two companies, across brand, commercial, and shareholding matters, will be terminated.
### Summary Table of Key Terms
| Aspect | Details | |--------------------------|-------------------------------------------------------------------------------------------| | **Massey Ferguson brand**| Exclusive ownership by TAFE in India, Nepal, Bhutan; includes trademarks and goodwill. | | **Shareholding** | TAFE retains 16.3% stake in AGCO; cannot exceed this ownership level. | | **Share repurchase** | TAFE may participate in AGCO buybacks but must maintain or reduce stake; no increase. | | **Governance** | TAFE relinquishes right to nominate AGCO board members; AGCO director leaves TAFE board. | | **Voting rights** | TAFE to vote shares mostly according to AGCO Board recommendations with limited exceptions. | | **Legal disputes** | All ongoing legal proceedings terminated; disputes settled. | | **Commercial agreements** | All terminated with agreed wind-down provisions. | | **Financial transaction** | TAFE to buy back AGCO’s 20.7% stake in TAFE for $260 million. | | **Non-disparagement** | Mutual agreement to avoid negative public statements or activism. |
This agreement will become effective upon the completion by AGCO and TAFE of certain governmental and other processes in India relating to the repurchase of the shares held by AGCO in TAFE. The agreements have been filed by AGCO with the U.S. Securities and Exchange Commission. The agreements do not specify any changes to the ownership or use of the Massey Ferguson brand outside of India, Nepal, and Bhutan.
In the financial sector, TAFE will purchase AGCO's stake in TAFE for $260 million, marking a significant shift in the shareholding structure between the two companies. This restructuring also includes TAFE's acquisition of the Massey Ferguson brand in India, Nepal, and Bhutan, signifying a transformation in their long-standing business relationship within the industry.
