You are here: Home » News-ANI » Business
Business Standard

Kubota to acquire 10 pc equity in Escorts for Rs 1,042 crore

ANI 

Japanese tractor and machinery manufacturer Kubota Corporation will invest Rs 1,042 crore to acquire 10 per cent equity stake in Escorts Ltd to integrate and deepen their relationship, it was announced on Friday.

Upon completion of the transaction, Escorts and Kubota will partner to become a leading player in the Indian market and a hub of product development, manufacturing and sourcing for global markets.

Escorts will issue and allot 1.22 crore equity shares through a preferential issue to Kubota at an issue 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 1,042 crore.

This price represents a premium of 48.21 per cent over the last traded price on March 19.

"This collaboration aims at leveraging research and development strengths of Kubota to offer cutting-edge products for domestic and export markets, serving customers in new markets and new product lines," said Nikhil Nanda, Chairman and Managing Director, Escorts Ltd.

"We are pleased to partner with Kubota to offer farmers with innovative solutions and thereby maximise productivity for profitable growth in domestic and export geographies," he said in a statement on Friday.

Yuichi Kitao, President and Representative Director for Kubota, said 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 mechanised farming," he added.

Escorts has a market capitalisation of 1.24 billion dollars and is among India's leading engineering conglomerates with operations in the high-growth sectors of agri machinery, material handling, construction equipment and railway equipment.

Kubota Corp has a market capitalisation of 15 billion dollars and specialises in agriculture, water and living environment products with a network spread over 100 countries.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, March 20 2020. 17:21 IST
RECOMMENDED FOR YOU
RECOMMENDED FOR YOU