Kubota to invest ₹1,872 crore in Escorts, become joint promoters with Nanda family

The company said the new investment would be through preferential allotment, following which Kubota’s stake in the company would increase from 9.09% to 14.99%.

Shares will be allotted to Kubota, subject to shareholder and regulatory approval, at the expense of 2,000 per. This price is at a premium of 29.5% over the floor price (as per SEBI norms) 1,544.16 per share, the company said.

In line with SEBI’s takeover norms, Kubota will also initiate an open offer from public shareholders in the company to acquire 26% stake in the company at par value. 2,000 per share. In case of full membership in the Open Offer, Kubota will liquidate with a 44.8% stake in the company (including the cancellation of certain shares held by Escorts Benefits and Welfare Trust).

The company said that it will change its name from Escorts Limited to Escorts Kubota Limited.

Nikhil Nanda will continue to be the Chairman and Managing Director of the company. The existing promoters are not selling any shares in the deal. The Nanda family holds 11.6% stake in the company, with Escorts Benefits and Welfare Trust holding a 25% stake.

The change in control of Escorts would result in an indirect change of control of Escorts Finance Ltd and thus would make an open offer for public shareholders of Kubota Escorts Finance to acquire up to 26% of the share capital, the statement said. The board of Escorts has agreed to evaluate and consider the feasibility of merger of Escorts Finance with the parent company.

“This will enable both companies to leverage each other’s strengths to enhance the value they have created – be it in technology, market access, manufacturing processes or engineering excellence. With this Escorts is positioned to become an institution that has been around for decades. and will serve Indian and global farmers for centuries.While Escorts is known for its strong presence in India along with proven strengths in frugal engineering and construction, Kubota brings world class processes and global reach and expertise.Chairman of Escorts Ltd. And Managing Director Nikhil Nanda said, the transaction will take Escorts to a different level of expertise, size and growth.