Escorts Ltd.& Kubota Corporation further deepen their existing relationship. Kubota Corporation to invest in Escorts Limited

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Kubota Corporation (“Kubota”), a leading global tractor and machinerymanufacturer from Japan, will acquire 10% equity stake, on a post capital reduction basis, in Escorts Ltd. (“Escorts”),a leading engineering conglomerate in India, in order to integrate and deepen their relationship towards achieving their mutual ambition ofglobal leadership.Upon completion of this transaction, Escortsand Kubota will partner to become a leading player in the Indian market and a hub ofproduct development, manufacturing and sourcing forglobal markets.

Key Transaction Highlights

  • Simultaneously with the Preferential Issue, Escorts will acquire 40% stake in Kubota Agricultural Machinery India Pvt. Ltd(“KAI”), the marketing and sales company of Kubota in India.
  • The existing 60:40 Joint Venture between Kubota and Escorts, namely Escorts Kubota India Private Limited (“EKI”), will continue to operate.

Strategic Rationale

  • Thiswill be a win-win collaboration and benefit
    • Escorts from product innovation through indigenization of global R&D, production systems excellence, global supply chain, sales and distributionand act as a global sourcing hub for Kubota; and
    • Kubota with assured supply of cost-effective products in and for India, joint product development for emerging and global markets, and expansion ofproduct rangethrough respective distribution networks.
  • New avenues of growth in construction equipment and agriculture implements, leveraging strengths of both the parties, with focus on products including earth moving equipment & smart agriculture implements.
  • Create one of the largest Indo-Japan agriculture collaboration aligned to Indian government’s “make-in-India” vision, by integratingtechnological excellence and frugal innovation to provide latest farm mechanization solutions across the globe.

Nikhil Nanda, Chairman and Managing Director, Escorts Ltd., said, “At Escorts, we believe in strategic global partnership with an objectiveto address global farm mechanization needs. We are pleased to partner with Kubotato offer farmers with innovative solutions and therebymaximize productivity for profitable growth in domestic and export geographies. This collaboration aims at leveraging R&D strengths of Kubota to offer cutting-edge products for domestic and export markets, serving customers in new markets and new product lines. With our manufacturing expertise and strong domestic distribution combined with collaboration with Kubota, we aim to reach our objective of becoming the market leader in farm mechanization,and address the food security challenge.”

Yuichi Kitao, President and Representative Director, Kubota, Japan, said, “We are excited to make strategic investment in Escorts. It is a validation of our mutual commitment to offer best in class technology products for global markets and thereby enhance customer experience. 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 mechanized farming. Kubota and Escorts, together, with their leadership in respective geographies will consolidate strengths and technology innovation excellence to emerge as a global leader.”

AboutEscorts:

Escorts (Market Cap: US$1.24 Bn) is among India’s leading engineering conglomerates, operating in the high-growth sectors of Agri Machinery, Material Handling, Construction Equipment and Railway Equipment. The Group has earned the trust of over 5 million customers by way of product and process innovations over seven decades. Escorts endeavors to transform lives in rural and urban India by leading the revolution in agricultural mechanization, modernization of railway technology and transformation of Indian construction.

AboutKubota:

Kubota Corp. (Market Cap: US$ 15.00 Bn) is a global manufacturing company, specializing in agriculture, water, and living environment products, with a worldwide network spread over over 100 countries. Kubota’s research and development values thorough hands-on approach. As an agricultural and water expert, we challenge and attain the future of food, water, and the environment, realizing our customer’s needs. Through proactive management, user-friendly products, and stable support, Kubota has been a leader in global agriculture and water-related industries.

For further information, please contact:

ESCORTS LIMITED TORQUE COMMUNICATIONS PVT LTD.
Sharad Gupta
sharad.gupta@escorts.co.in
Priya Sewa
priya@torquemail.com

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