Kubota Invests in Indian Tractor Manufacturer Escorts Limited
— Accelerating its Business in the World’s Largest Tractor Market —

Kubota
Corporation (Headquarters: Naniwa-ku, Osaka, Japan; President and
Representative Director: Yuichi Kitao; hereinafter, “Kubota�) announced today
that it will invest in an Indian leading tractor manufacturer, Escorts Limited
(Headquarters: India, Chairman and Managing Director: Nikhil Nanda;
hereinafter, “EL�).

Through this investment, Kubota intends to increase its presence in India – the
world’s largest tractor market – as well as its commitment to the competitive
tractor market, which has massive growth potential, thus further expanding its
business.

Tractor
produced by EL started distributing through Kubota’s sales network in
worldwide.

•  
•  
• Background and aims
•  

• The tractor market in
  India is one of the world’s largest in terms of unit sales and expects to
  expand further. In 2008, Kubota established Kubota Agricultural Machinery
  India Pvt. Ltd. (hereinafter, “KAI�) as a foothold in the Indian market.
• At present, local
  manufacturers are playing key roles there, and they are all enhancing
  partnerships with foreign-affiliated manufacturers. In February 2019,
  Kubota established a joint-venture tractor manufacturing company with EL
  and mass production is due to start this July.
• Through this capital
  tie, the two companies intend to deepen their cooperative relationship
  further and, by leveraging each other’s strengths, create synergy across a
  broad range of their business, including development, production, sales,
  distribution, and parts procurement, in a bid to extend their reach in the
  Indian market.
• Meanwhile, the
  competitive tractors which currently form the core of the Indian tractor
  market, are gaining popularity in other markets around the world. Kubota
  hopes to expand its global reach in those model market by tapping into
  EL’s parts procurement networks and capability to reduce cost.

Investment scheme

• EL will issue new
  equity shares to Kubota on a preferential allotment basis (subject to
  shareholders’ and necessary regulatory approvals) pursuant to which Kubota
  will hold 9.1% of EL’s paid up share capital.
• The total amount of
  investment will be approximately 16 billion yen.
• Subsequent to the
  preferential allotment to Kubota, EL will undertake a reduction of its
  share capital from the shares held by the Escorts Benefit and Welfare
  Trust (subject to receipt of necessary approvals) of such number of equity
  shares as are being issued to Kubota under the preferential allotment.
  Post the capital reduction, Kubota’s stake in EL will increase to 10%.
• About the investee

•  
• Future developments
•  

• After going through
  the necessary procedures and subject to receipt of requisite approvals,
  the investment is likely to be completed by June 2020.
• To further facilitate
  and strengthen the collaboration with EL, Kubota will sell 40% of stake in
  KAI to EL, in addition to this investment.
• Going forward, Kubota
  aims to establish a joint research and development center with EL to
  develop products that are optimized for the local market and shorten the
  development period.