CCI approves Kubota Corp's 9 pc stake-buy in Escorts

New Delhi, Jul 10 () The Competition Commission on Friday said it has given nod to acquisition of a little over 9 per cent stake in Escorts Ltd by Kubota Corporation, and 40 per cent stake acquisition in Kubota Agricultural Machinery India by Escorts.

In March, domestic tractor maker Escorts had said that Kubota Corporation and the company have decided to strengthen their partnership under which the Japanese tractors and machinery leader will pick a 10 per cent stake in the Delhi-based company for Rs 1,042 crore.

Under the deal, Escorts will allot about 1.23 crore equity shares through a preferential issue to Kubota Corp at Rs 850 per share, it had said.

The equity sale will be from the shares held by Escorts Benefit & Welfare Trust to ensure that the total equity share capital of the company remains unchanged.

Kubota Corp will subscribe to 1,22,57,688 equity shares of Escorts constituting 9.09 per cent of the equity stake on a pre-capital reduction and 10 per cent on a post-capital reduction basis, as per the combination notice filed with the regulator.

Besides, the notice also said that Kubota Corp will acquire the complete 40 per cent shares held by Sumitomo Corporation in Kubota Agricultural Machinery India Pvt Ltd, which would subsequently by acquired by Escorts.

The fair trade regulator in a tweet said it "approves the acquisition of 9.09 per cent in Escorts Limited (Escorts) by Kubota Corporation and of 40 per cent in Kubota Agricultural Machinery India Private Limited by Escorts."

Kubota Corp is a global manufacturing company, specializing in agriculture, water and living environment products.

Kubota Corp and Escorts already have a joint venture, Escorts Kubota India, in which the Japanese company owns 60 per cent stake, while the rest is with Escorts. SRS RVK