Valtra Reaches 1000th CVT Transmission Milestone
AGCO’s Valtra brand has announced a production milestone at its Suolahti, Finland, factory with the completion of the 1000th AGCO continuously variable transmission (CVT).
Seemingly having been dragging on for an extended time, both parties have agreed, subject to local laws, to bring any dispute to a close.
Two major points that have been agreed is the ownership of the Massey Ferguson brand will rest with TAFE on an exclusive basis in India, Nepal, and Bhutan.
During deliberations, TAFE insisted because it had represented and developed the MF brand within India since the 1950s, it was entitled to consider the famous red livery the property of the company, so went to court to establish and protect this right in law.
AGCO countered this assumption and strongly disputed what it considered to be an attempted theft of a major trademark.
The outcome is extremely surprising that the corporation has handed over a world-famous brand with the agreement, although industry sources suggest that AGCO attempting to use the MF brand itself in the three countries concerned, was likely to be commercially impractical.
Both companies have also agreed to untangle themselves from the mutual shareholdings they both hold. Over the years it appears that AGCO had become concerned by TAFE's level of ownership within their corporation.
Following the settlement, TAFE will no longer carry any influence in the AGCO boardroom, while TAFE has agreed to allow AGCO to buy its shares back from the India company, while retaining the right to hold up to 16.3% of AGCO's stock. At the same time, AGCO will sell its shares in TAFE back to the Indian company for $260 million.
A further condition at the heart of the agreement will mean that TAFE will not be entitled to a seat on the AGCO board and its shares will vote in accordance with the recommendation of the board. These points reduce any influence that TAFE may have on the running of AGCO.
For AGCO, it achieves a complete independence from TAFE, while TAFE takes formal ownership of the MF brand in India, something it has coveted for many years, while also putting pay to industry rumours that TAFE was attempting to buy the whole of Massey Ferguson from AGCO.
