M&M to acquire Turkish Erkunt group's tractor & foundry firms
20 Sept 2017 10:53 PM IST
Mumbai: Mahindra & Mahindra (M&M) on Wednesday said it has signed pacts with Turkey-based Erkunt group to acquire its tractor manufacturing and foundry businesses for about Rs 735 crore, which will help it enhance its product portfolio.
M&M said it will acquire Erkunt Traktor Sanayii, for Rs 478 crore, a move which is aimed at entering the fourth largest tractor market in the world.
Besides, it has inked a share purchase agreement to acquire 80 per cent stake in Erkunt Sanayi AS for Rs 257 crore. The entity is engaged in production of engine blocks, cylinder heads and transmission cases.
The transaction is expected to be closed by November 30, 2017.
The Erkunt deal, which comes on the back of the Hisarlar acquisition earlier in the year, is expected to help Mahindra's farm equipment business in the strategic market of Turkey.
"Turkey is a very important market in our globalisation journey and we wish to participate in its entire agri mechanisation landscape. The acquisition of Erkunt will enable Mahindra to expand its footprint in the world's 4th largest tractor market," Mahindra & Mahindra Ltd's Managing Director Pawan Goenka said.
Mahindra's strategy for its farm equipment business is to globalise aggressively and also expand its portfolio to include various new categories of tractors and farm machinery, he said.
"We will look at farm equipment as a whole for growth.
We will continue to grow market share, (and) we will grow with market," he said.
This acquisition is expected to increase Erkunt's market share to 8-9 per cent from six per cent at present, Goenka added.
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