Mahindra buys Turkish tractor maker
MUMBAI: Mahindra and Mahindra Ltd on Wednesday said it has acquired Erkunt Traktor Sanayii AS, a Turkish tractor maker and its foundry business for ₹800 crore via Mahindra Overseas Investment Co(mauritius) Ltd.
The buyout will provide the company access to Turkish agricultural machinery market, the fourth largest globally, and help the Mumbai-based firm enhance its product portfolio. The transaction, subject to regulatory approval, is expected to be com- pleted by November 30.
“Turkey is a very strategic market for us; therefore through Hisarlar Makina Sanayi ve Ticaret Anonim irketi (Hisarlar) acquisition, which specialises in implements and the one we have announced today, we are putting a firm foot in the Turkish tractor market, a market which is twothird the size of India,” said Pawan Goenka, MD at Mahindra and Mahindra. (Mahindra had acquired 75.1% in Hisarlar, a Turkish farm equipment company on 21 January.)
The latest buyout, he pointed out, is part of a larger strategy that has globalisation and diversifying product portfolio beyond tractors, as two important pillars of growth strategy for the farm equipment business.
While the Turkish firm will gain from Mahindra’s expansive reach, it would help the tractor market leader in India to add to its product portfolio, he said.
After this acquisition, Mahindra will focus on consolidating its presence in the overseas markets. These include Brazil, Turkey, Japan and Algeria. “It will be more about penetrating deeply in the regions we have entered into instead of getting to newer ones,” he said.
As part of the agreement, Mahindra will acquire 100% of the share capital of Erkunt Traktor and at least 80% of Erkunt Sanayii A.S, which is held by Erkunt Traktor. The tractor-making entity markets tractors under Armatrac brand.
The Hisarlar deal will help in growing the farm equipment business in Turkey and Europe, Mahindra said. Other than Mahindra, the other shareholders in the company are European Bank for Reconstruction and Development (18.7%) and the founding Turker family (6.2%).