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.

Source: Escorts

This is part of Kubota’s strategy to double down on the growth potential of the tractor market in India.

The Escorts Group is exploring a complete sale of the holding, although this could happen in stages, said industry insiders. A source said Kubota aims to establish a joint research and development center with Escorts to develop products optimized for the local market.

In March 2020, Kubota acquired about 9.9 percent of Escorts through preferential allotment.

Source: Economic Times