Reiterates confidence in company's Board and
management team to execute Farmer-First strategy; Challenges TAFE's
self-serving campaign
DULUTH,
Ga., Aug. 7, 2024 /PRNewswire/ -- AGCO (NYSE:
AGCO), a global leader in the design, manufacture and distribution
of agricultural machinery and precision ag technology, today issued
the following statement in response to TAFE's amended 13D
filing:
AGCO maintains an open dialogue with all stockholders and
welcomes constructive input toward the shared goal of maximizing
stockholder value. The Board of Directors is committed to acting in
the best interests of all AGCO stockholders and will continue to
take actions to deliver returns on their behalf. To that end, AGCO
regularly engages with TAFE, whose Chairman and Managing Director,
Mallika Srinivasan, serves as a
non-independent director of AGCO.
As part of the company's continuing review of its business and
operations, the company filed notice of termination of certain
commercial agreements with TAFE in April
2024. This decision followed extensive discussions with TAFE
over multiple years concerning TAFE's continued poor operational
performance as a supplier, brand licensee and distributor to AGCO,
as well as TAFE's continued lack of focus on AGCO customers in
several key markets. These discussions were held at multiple levels
of the organization, including with Ms. Srinivasan over the past
several years. Despite assurances from TAFE that these issues would
be addressed, there continued to be a lack of meaningful progress.
As a result of the termination notices, TAFE subsequently commenced
litigation against AGCO in India,
which remains ongoing today.
AGCO and TAFE have always treated the commercial and business
relationship as separate from the TAFE investment in AGCO and its
representation on AGCO's Board. TAFE agreed to renew the limited
standstill agreement with AGCO without conditioning it on the
continuation of the commercial agreements, as it has always done
since 2014 and notwithstanding the ongoing commercial issues being
discussed.
It is disappointing that it appears that TAFE has now chosen to
respond to a commercial decision by threatening the use of the
consent solicitation process in an attempt to pressure AGCO. AGCO's
Board and management team remain focused on executing its
Farmer-First strategy to drive continued value creation for all its
stockholders. Replacing AGCO's independent directors with TAFE's
hand-picked nominees would serve only to assist in prioritizing the
interests of TAFE and its operations above the interests of AGCO's
other stockholders.
AGCO's Board is comprised of directors with diverse skills and
experiences that are highly relevant to the business needs and
current strategy. Over the last five years, AGCO has refreshed its
Board with five new independent directors, each bringing select,
complementary skillsets. Additionally, AGCO has significantly
enhanced its governance practices, including adopting term limits
for the lead director and committee chairs, strengthening lead
director duties, and increasing the share ownership requirements
for its directors and CEO.
The Board works closely with Chairman, President & CEO
Eric Hansotia, who has pioneered
AGCO's Farmer-First strategy – a strategy the Board remains
confident will maximize long-term value creation for stockholders.
AGCO has achieved several milestones as part of its strategy to
deliver stockholder value:
- Record 2023 full-year financial results, including $14.4 billion in net sales, which outperformed a
global market that was down for the year; record adjusted operating
margin of 12%, which reflects an increase of 170 basis points
compared to 2022 and nearly delivered on AGCO's previously stated
2026 target; record Earnings Per Share (EPS) of $15.63. These results are just the latest
successes of the Farmer-First strategy, which also yielded record
results in 2021 and 2022.
- The recently formed joint venture with Trimble, which is
expected to be accretive to revenue growth, adjusted operating
margin and adjusted EPS in the first full year following closing
and will create an industry leader in mixed fleet precision ag
solutions, and significantly enhances AGCO's technology stack
offering to better serve farmers worldwide.
- Significant capital return to stockholders of over $1.6 billion since 2021, including the special
variable dividends totaling $16.00
per share, which is incremental to AGCO's quarterly dividend, which
was increased by 20% in both 2022 and 2023.
- Consistent portfolio evaluation, including the recently
announced sale of the Grain & Protein business for
approximately $700 million, which
supports AGCO's strategic transformation, allowing the company to
streamline and sharpen its focus on a portfolio of award-winning
agricultural machinery and precision ag technology products.
Given the current agricultural equipment environment, AGCO also
is taking aggressive actions, including the recently announced
restructuring program, to control expenses, reduce production
levels and lower investments in working capital. Also, the company
is balancing these near-term cost reductions with continued
investment in longer-term, high-margin growth initiatives designed
to deliver more sustainable results through economic cycles. AGCO
is committed to maintaining a constructive dialogue with all
stockholders and will listen carefully to their perspectives.
About AGCO
AGCO (NYSE: AGCO) is a global leader in the design, manufacture
and distribution of agricultural machinery and precision ag
technology. AGCO delivers value to farmers and OEM customers
through its differentiated brand portfolio including core brands
like Fendt®, GSI®, Massey Ferguson®, PTx and Valtra®. AGCO's full
line of equipment, smart farming solutions and services helps
farmers sustainably feed our world. Founded in 1990 and
headquartered in Duluth, Georgia,
USA, AGCO had net sales of approximately $14.4 billion in
2023. For more information, visit www.agcocorp.com. For company
news, information, and events, please follow us on X: @AGCOCorp.
For financial news on X, please follow the hashtag
#AGCOIR.
Safe Harbor Statement
Statements that are not
historical facts, including statements regarding the amended
Schedule 13D filing by TAFE, the joint venture with Trimble and any
anticipated benefits resulting from that transaction, the recently
announced sale of our Grain and Protein business and any
anticipated benefits from that transaction, our previously
announced restructuring and our efforts to control expenses,
industry demand, market conditions, our ongoing strategy,
investments in product and technology development, new product
introductions, restructuring and other cost reduction initiatives
and general economic conditions, are forward-looking and subject to
risks that could cause actual results to differ materially from
those suggested by the statements. The factors that could cause
actual results to differ materially from the results discussed in
or implied by the forward-looking statements are included in AGCO's
filings with the Securities and Exchange Commission, including
its Form 10-K for the year ended December 31, 2023, and
subsequent Form 10-Qs. AGCO disclaims any obligation to update any
forward-looking statements except as required by law.
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SOURCE AGCO Corporation