India-based farm and construction equipment manufacturer Escorts will transfer more than half of its stake to Kubota by the end of March. The transfer is a step toward establishing a mid-term business and investment road map for Escorts Kubota, the new entity, according to Bharat Madan, group chief financial officer for Escorts.
The deal is awaiting approval from a Securities and Exchange Board of India.
In November, Kubota Corp. announced it would acquire a majority stake in Escorts. The company’s holding will increase from 9 percent of shares to more than 50 percent, depending on the extent of the tendering process.
Madan said the companies plan to discuss the next five years, “laying a road map of how the company is going to work and the areas we really want to go into and what sort of investments we need. We will obviously be expanding into the implements business in a big way.”
He continued: “Most importantly, a global R&D facility will be set up at Escorts in India, so that we can look at product development for the entire global requirement and for India.”
Escorts reported 3 percent year-on-year fall in standalone revenue and an almost 20 percent dip in tractor sales volumes in a recent quarterly report.