Behind the tangle at tractor giants Tafe and Agco
Subscribe to enjoy similar stories. Growing anxiety over Tractors and Farm Equipment Ltd's (Tafe) rising ownership in Agco Corp., plus its demand for board-level changes at the US-based tractor maker, prompted the latter to snap its brand agreement with the Chennai-based company, according to Tafe's court filings, as well as a senior company executive. After discontinuing some business ties with Tafe earlier this year, Agco on 30 September terminated its agreement that allowed Tafe to sell tractors under the Massey Ferguson brand, accusing the Indian company of what it called inappropriate and unauthorized actions.
The developments come as a possible case of shareholder activism by a homegrown entity rattling a large foreign company. “The Tafe-Agco matter has been triggered by two fundamental reasons. One, as you said citing legal documents, is perhaps because the executive (Agco CEO EricHansotia) was concerned about the rising ownership of Tafe in Agco," said T.R.
Kesavan, group president, corporate relations and alliances, Tafe. Tafe first acquired a 12.5% stake in Agco in 2012, a year after Tafe chairman and managing director Mallika Srinivasan joined the board of the US company. Tafe has since increased its stake in Agco, touching 16.31% at the end ofSeptember2024, making it the single-largest shareholder in the world's third-largest tractor maker.
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