Rebuilding TAFE

After a protracted legal battle with US agricultural machine manufacturer AGCO, Mallika Srinivasan is leading the tractor maker with renewed vigour

- By MANU BALACHANDRAN

It's been a fierce few months at one of the country's largest tractor makers. But, at the end of it all, if anything, the relentless Mallika Srinivasan and her tractor company, Tractors and Farm Equipment Ltd (TAFE), have only emerged stronger.

In July, after a yearlong battle with American agricultural machine manufacturer AGCO, TAFE, started by Mallika's grandfather S Anantharamakrishnan, decided that all commercial agreements between the two companies were to be terminated, with the brand ownership of the legendary Massey Ferguson tractors now firmly with TAFE for the India, Nepal and Bhutan regions.

The deal also saw all legal proceedings terminated, and TAFE agreeing to participate in future share repurchase programmes that AGCO executes, while retaining the right to maintain, but not exceed, its current ownership level of 16.3 percent. TAFE is the single largest shareholder in AGCO, the third-largest farm equipment manufacturer in the world, after Deere & Company and CNH Industrial. On the other hand, AGCO holds 21 percent of TAFE, and TAFE will now also forgo its board nomination rights, vote its AGCO shares in line with management, and abstain from activism.

In many ways, the end of the longstanding rift between the Indian tractor giant and the American agri major marks a new beginning for TAFE and Srinivasan, whose husband and son, Venu Srinivasan and Sudarshan Venu, respectively, control TVS Motors. Massey Ferguson, the brand that TAFE built and nurtured over the past six decades, contributes to 55 percent of its sales in the country. Last year, in April, AGCO announced the termination of its agreements with TAFE, including the brand licence for Massey Ferguson, leading to a legal tussle.