Agco and Tractors and Farm Equipment (TAFE) from India announced July 1 that they had settled their legal dispute, which began in 2024 over local ownership of the Massey Ferguson brand name and other concerns.
In April of that year, ongoing tensions between the two firms blew up, and TAFE launched legal proceedings after Agco filed notice it intended to cancel the agreement that allowed TAFE to manufacture tractors under the Massey Ferguson brand in India.
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An Indian court temporarily put that cancellation on hold as the two companies litigated the matter.
The original agreement, which allowed TAFE to manufacture older versions of Massey Ferguson tractors for the Asian market, has been in place since 1960. A 1974 agreement allowed TAFE to use the MF brand name on those tractors.
Agco had also been purchasing some small tractor models built by TAFE and retailing them in other global markets. One estimate pegged the value of that deal at US$171.6 million along with $3.6 million worth of parts.
The recent settlement sees the end of all commercial agreements between the two firms and the end of all legal proceedings. TAFE will get ownership of the Massey Ferguson brand name exclusively in India, Nepal and Bhutan, but nowhere else.
One of the irritants between the two companies was TAFE had acquired more Agco shares than was previously agreed, reaching 16.3 per cent of all outstanding shares. TAFE agreed to not exceed that amount in the future, and Agco has agreed to sell its 21 per cent share in TAFE for $260 million.
TAFE chief executive officer Mallika Srinivasan also had a seat on Agco’s board of directors, but the agreement calls for the Indian company to give up its right to appoint a director to Agco’s board. Its current board appointee will step down.
Srinivasan had been vocal over the past year, calling for shareholder activism against Agco’s executives and critical of the company’s market approach. Just before the December 2024 Agco shareholders’ meeting, TAFE published a letter to shareholders outlining 10 questions it wanted Agco’s executives to address over what it considered inadequate management approaches to the business.
“We are pleased to have reached an amicable resolution with TAFE on all outstanding commercial, governance and shareholding matters,” Agco chair, president and CEO Eric Hansotia said in a press release.
“We appreciate the TAFE relationship for its years as a commercial partner and continued support as a shareholder.”
Indian news publications report that Srinivasan released a similar conciliatory statement.
