Mahindra & Mahindra (M&M) on Friday said that it has acquired a majority stake in Turkey-based farm equipment company Hisarlar Makina Sanayi ve Ticaret Anonim irketi (Hisarlar) for around $19 million (nearly R129 crore), thus foraying into the European nation. Under the transaction, which is expected to close by April 2017, M&M will acquire 75.1% stake in Hisarlar. “The association will help in growing the farm equipment business in Turkey and Europe,” M&M said in a statement.
The balance shareholding in the Turkish firm will be with the European Bank for Reconstruction and Development (EBRD) (18.7%) and the founding Turker family (6.2%), respectively, it added. Further, as part of the transaction, Darby ConvergingEurope Fund III will exit its investment.
M&M managing director Pawan Goenka said: “Our strategy going forward is to globalise aggressively and also expand our portfolio to include various new categories of farm machinery. This acquisition is an important milestone in our globalisation journey.”
M&M will have majority in the board and control the management of Hisarlar, a key player in the agriculture machinery industry, tractor cabins and components for off-highway machinery.
Hisarlar, in agriculture machinery business has 49% market share while in the tractor cabin manufacturing it has 42% market share in the Turkish market. It has a top-line or revenue of $71 million and 35% of the total volumes come from the export business.
According to Rajesh Jejurikar, president and chief executive, Farm equipment and two-wheleer, M&M , Hisarlar is a Ebitda positive company but did not reveal the bottom-line figures.
Mahindra also plans to introduce its tractors and harvesters made by Sampo to the European markets and other markets in the future and Hisarlar will provide necessary support for that since it it is already well entrenched in the market.
In March 2016, M&M had acquired 35% in Finnish farm equipment manufacturer Sampo Rosenlew which specialises in manufacturing harvesters.