(Bloomberg) -- AGCO Corp. has terminated a licensing agreement that allowed Tractors and Farm Equipment Ltd. to use its iconic red tractor brand Massey Ferguson.
AGCO said Monday TAFE no longer is an approved licensee, user, distributor or seller of Massey Ferguson in India, Nepal, Sri Lanka, Bangladesh and Bhutan. AGCO said the Indian company’s interests are “fundamentally misaligned” with those of its shareholders.
TAFE, which has a roughly 16% stake in AGCO, separately said in a letter AGCO should restructure its board and improve capital allocation. The letter follows a Bloomberg story in August that TAFE was seeking to replace AGCO directors.
AGCO, in its response to the letter, said its board has “been meaningfully refreshed in recent years.”
The moves come as abundant global crop supplies have brought down farm income, slowing demand for machines to plant, protect and harvest crops. AGCO shares have declined about 19% this year.
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