The Competition Commission of India (CCI) has approved acquisition of certain additional equity buy by Kubota Corporation (Acquirer) in Escorts Ltd (Target). 

It maybe recalled Japanese tractor major Kubota Corporation had in November last year announced that it will invest ₹ 9,400 crore in a deal to acquire majority stake in tractor maker Escorts Ltd. The deal is expected to increase Kubota’s shareholding in Escorts to 53.5 per cent from current 9 per cent.

In a statement to the Bombay Stock Exchange, Escorts had in November 2021 stated that Kubota stake would be increased through the two tranches. In the first tranche, Escorts will give preferential allotment to Kubota at ₹ 2,000 per share, infusing ₹ 1,870 crore. In addition, Kubota will make an open offer at a preferential allotment price of ₹ 7,500 crore. 

CCI said in a statement on Wednesday that the proposal approved by it involves Kubota’s acquisition of certain additional equity shares of Escorts by way of preferential allotment and a mandatory tender offer in compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Kubota was founded in 1890, and is incorporated under the laws of Japan. Kubota is a comprehensive agriculture product manufacturer and offers various machinery such as tractors, combine harvesters, and rice transplanters. Kubota also offers engineering, procurement, construction to maintenance, contributing to safety and security of water, an official release said. 

Escorts is engaged in the business of manufacturing and sale of agri-machinery, constructionand railway equipment in India. Further, Escorts through its subsidiaries and joint ventures is also engaged in the business of crop solutions, finance and securities in India. 

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