11/18/2021 | Press release | Distributed by Public on 11/18/2021 02:36
New Delhi, November 18, 2021: Escorts Limited ("Escorts") and Kubota Corporation ("Kubota"), a global leader (Market Cap of ~US$ 24 Bn) in tractor and machinery, have decided to strengthen their partnership in pursuit of their vision of global leadership in Agri Machinery. As part of this, Kubota Corporation shall increase its equity stake in Escorts by subscribing to new equity shares proposed to be issued by Escorts and shall become a joint promoter along with existing promoter of Escorts. This transaction shall pave the way for Escorts and Kubota to seamlessly integrate their respective strengths to become a formidable global force in the farm equipment sector.
This partnership with Kubota will enable Escorts to have access to global best practices and state of the art research & development facilities which will complement Escort's proven strengths in engineering and execution - to deliver high quality, cost-efficient solutions, in India and across the world.
Key Transaction Highlights
Strategic Rationale
Explaining the strategic intent, Nikhil Nanda, CMD, Escorts Limited, said "We are delighted to embark on a journey of global leadership in agri-machinery in partnership with Kubota Corporation. I am pleased to announce the enhancement of Kubota's current holding in the company. This will enable both companies to enhance the value they have created by leveraging each other's strengths - be it in technology, market access, manufacturing processes or engineering excellence. With this Escorts is positioned to become an institution that will serve Indian and global farmers for decades and centuries. While Escorts is known for its stronger India presence with proven strengths in frugal engineering and manufacturing, Kubota brings world-class processes and global reach and expertise. The construct of the new collaboration shall be based on excellence and innovation to cater to the needs of customers globally, addressing food security and environmental challenges by providing smart agriculture and infrastructure solutions. The transaction will catapult Escorts to a different level of expertise, size and growth. I am proud that Escorts has taken the leap into the future with this partnership.".
Yuichi Kitao, President and Representative Director, Kubota, Japan, said, "The journey between Kubota Corporation & Escorts Limited, which began in 2016, has reached a major milestone today with signing of a historic agreement. I would like to express my gratitude to everyone at Kubota & Escorts for their efforts. Both Kubota Corporation & Escorts Limited have a legacy of more than 130 and 75 years respectively. The combined entity and the larger collaboration will provide advanced farm mechanisation solutions to address global food security & enhanced farm productivity. We are extremely proud and excited to unite for the future as a One Company"
The transaction is subject to customary regulatory and other approvals and closing conditions
JM Financial acted as the financial advisor, Transaction Square acted as the transaction advisor and DMD Advocates acted as the legal advisor to Escorts Limited.
About Escorts:
Escorts (Market Cap: ~US$3 Bn) is among India's leading engineering conglomerates, operating in the high growth sectors of Agri Machinery, Material Handling, Construction Equipment and Railway Equipment. The Group has earned the trust of over 5 million customers by way of product and process innovations over seven decades. Escorts endeavours to transform lives in rural and urban India by leading the revolution in agricultural mechanization, modernization of railway technology and transformation of Indian construction.
About Kubota:
Kubota Corp. (Market Cap: ~US$ 24 Bn) is a global manufacturing company, specializing in agriculture, water, and living environment products, with a worldwide network spread over100 countries. Kubota's research and development values thorough hands-on approach. As an agricultural and water expert, we challenge and attain the future of food, water, and the environment, realizing our customer's needs. Through proactive management, user-friendly products, and stable support, Kubota has been a leader in global agriculture and water-related industries.
For further information, please contact
Bharat Madan
Group CFO and Corporate Head
Escorts Ltd.
Email ID: [email protected]