Kubota Corporation will acquire 10% equity stake, on a post capital reduction basis, in Escorts. Upon completion of this 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.
Strategic Rationale
· This will be a win-win collaboration and benefit
– Escorts from product innovation through indigenisation of global R&D, production systems excellence, global supply chain, sales and distribution and 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 of product range through 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 integrating technological excellence and frugal innovation to provide latest farm mechanization solutions across the globe.
Nikhil Nanda, Chairman and Managing Director, Escorts said, “At Escorts, we believe in strategic global partnership with an objective to address global farm mechanisation needs. 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. 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 mechanisation, 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.”