Agco says TAFE agreements ended over poor operational performance

Agco issued a statement in response to TAFE’s amended 13D filing. The company said in part, “AGCO maintains an open dialogue with all stockholders and welcomes constructive input toward the shared goal of maximizing stockholder value. The Board of Directors is committed to acting in the best interests of all AGCO stockholders and will continue to take actions to deliver returns on their behalf. To that end, AGCO regularly engages with TAFE, whose Chairman and Managing Director, Mallika Srinivasan, serves as a non-independent director of AGCO. As part of the company’s continuing review of its business and operations, the company filed notice of termination of certain commercial agreements with TAFE in April 2024. This decision followed extensive discussions with TAFE over multiple years concerning TAFE’s continued poor operational performance as a supplier, brand licensee and distributor to AGCO, as well as TAFE’s continued lack of focus on AGCO customers in several key markets. These discussions were held at multiple levels of the organization, including with Ms. Srinivasan over the past several years. Despite assurances from TAFE that these issues would be addressed, there continued to be a lack of meaningful progress. As a result of the termination notices, TAFE subsequently commenced litigation against AGCO in India, which remains ongoing today…Given the current agricultural equipment environment, AGCO also is taking aggressive actions, including the recently announced restructuring program, to control expenses, reduce production levels and lower investments in working capital. Also, the company is balancing these near-term cost reductions with continued investment in longer-term, high-margin growth initiatives designed to deliver more sustainable results through economic cycles.”