Kubota Corporation, a Japan based tractor and machinery manufacturer has acquired 10 per cent equity stake in Escorts LTD. After the complet...
Kubota Corporation, a Japan based tractor and machinery manufacturer has acquired 10 per cent equity stake in Escorts LTD. After the completion of this acquisition, Escorts and Kubota will partner for the product development, manufacturing and sourcing of tractors for global markets. Escorts will issue 12,257,688 equity shares through a preferential issue to Kubota at a price of Rs. 850 per equity share. Kubota's investment will constitute 9.1 per cent of the equity stake on a pre capital reduction or 10 per cent on a post capital reduction basis for a total investment of Rs 10,419,034,800.
Nikhil Nanda, Chairman and Managing Director, Escorts Ltd., said, "At Escorts, we believe in strategic global partnership with an objective to address global farm mechanization needs. We are pleased to partner with Kubota to offer farmers with innovative solutions and thereby maximize productivity for profitable growth in domestic and export geographies. This collaboration aims at leveraging R&D strengths of Kubota to offer cutting-edge products for domestic and export markets, serving customers in new markets and new product lines. With our manufacturing expertise and strong domestic distribution combined with collaboration with Kubota, we aim to reach our objective of becoming the market leader in farm mechanization, and address the food security challenge."
Yuichi Kitao, President and Representative Director, Kubota, Japan, said, "We are excited to make strategic investment in Escorts. It is a validation of our mutual commitment to offer best in class technology products for global markets and thereby enhance customer experience. Escorts has a strong technology legacy and diversified portfolio in agriculture equipment solutions market and Kubota has proven global technology capabilities. Through this collaboration, we believe that we will cater to India and other growing economies which require high-end technology and new age tractors to address growing demands of highly mechanized farming. Kubota and Escorts, together, with their leadership in respective geographies will consolidate strengths and technology innovation excellence to emerge as a global leader."
Simultaneously with the Preferential Issue, Escorts will in-turn acquire 40 per cent stake in Kubota Agricultural Machinery India Pvt. Ltd (KAI). The existing 60:40 Joint Venture between Kubota and Escorts, namely Escorts Kubota India Private Limited (EKI) will continue as it is. Escorts will continue with product innovation activities through indigenization of global R&D, production systems excellence, global supply chain, sales and distribution and act as a global sourcing hub for Kubota. Whereas, Kubota will look after the supply of cost-effective products in India along with joint product development for emerging and global markets, and expansion of product range through respective distribution networks.
from CarandBike - Latest News https://ift.tt/33BfXmE
COMMENTS