Mahindra bags Romania's Tractorul

ACTION HOTS UP ON DEAL STREET

Turned out to be sole bidder for 80% stake.

Mahindra & Mahindra (M&M), the country's largest tractor company, is expected to complete the acquisition of Romanian tractor firm SC Tractorul UTB SA in two months.

Confirming this, Romania's Commerce Minister Ioan-Codrut Seres said, "M&M is in final talks with our privatisation department on various clauses of the agreement""the level of investment and the number of workers to be employed."

M&M, which bid for 80 per cent in Tractorul three months ago, emerged the sole bidder for the Rs 250 crore Romanian firm. The company produces 15,000 tractors a year at its facility in Brasov and has an additional capacity of 18,000 engines.

When contacted, the official spokesperson for M&M declined to divulge details. "All I can say is that we have put in a bid," she said.

The Romanian government had put Tractorul on the block again after Italy's Landini backtracked from its initial offer.

The acquisition would help M&M to foray in the European markets ""something the company has been trying to do for the past three years, sources said. In 1992, it had made an abortive attempt to acquire Finland-based Valtra.

M&M had recently entered China by forming a joint venture, Mahindra (China) Tractor Company. The joint venture's Nanchang plant has a capacity to manufacture 12,000 tractors a year. The company will cater to the Chinese market as well export to the US, Australia and India. M&M has set a target of becoming the fourth largest tractor manufacturer in the world over the next five years.