Japan’s Kubota said on Thursday that it would take a controlling shareholding in Indian agricultural machinery maker Escorts for about $1.2 billion and enter the “affordable basic tractors” market.
The two companies established a joint venture in 2019 and plan to step up efforts to increase Indian market share.
“Kubota will provide quality and affordable basic tractors, by utilising Escorts’ knowhow and Kubota’s accumulated product development knowledge and capabilities to improve quality and productivity,” the Japanese company said.
Nikhil Nanda would continue as Escorts chairman and managing director, Kubota said.
He would also assume the newly created titles of senior managing executive officer and general manager of value-innovative farm and industrial machinery strategy and operations .
Kubota shares fell 8% on Thursday after its quarterly earnings fell short of analyst expectations.
Last year, Kubota and Escorts, India’s third largest farm equipment maker, agreed to create a new brand, “E Kubota,” under which they will market low-cost tractors in Eastern Europe, Africa and other regions, from this year.
Demand for agricultural equipment is expected to grow in emerging markets as farming becomes increasingly mechanised.
• George Russell
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