Mahindra & Mahindra (M&M) has acquired a majority stake in Turkey-based farm equipment company Hisarlar Makina Sanayi ve Ticaret Anonim irketi (Hisarlar) for around USD 19 million (nearly Rs 129 crore), thus foraying into the European nation.
Under the transaction, which is expected to close by April 2017, Mahindra will acquire 75.1 per cent stake in Hisarlar.
"The association will help in growing the farm equipment business in Turkey and Europe," M&M today 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 per cent), respectively, it added.
Further, as part of the transaction, Darby Converging Europe 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."
Mahindra will invest 71 million Turkish lira (equivalent to around USD 19 million) in Hisarlar as fresh equity infusion into the company, giving it a 75.1 per cent stake.
The Mumbai-based firm 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.
"The acquisition of Hisarlar will enable Mahindra to expand its footprint in Turkey and Europe, making this entity a global manufacturing base for various farm implements and tractor cabins," said Rajesh Jejurikar, President and Chief Executive, Farm Equipment & Two Wheeler, M&M.
Hisarlar's revenue in 2015 was 208 million Turkish lira, with exports constituting around 35 per cent of sales.
The company has two production facilities in western Turkey and employs a total of about 820 people. It is the leader in the soil preparation category of implements with a 45 per cent market share in Turkey.
The company has strong brands in this segment, supported by a distribution network of 85 dealers across Turkey.
Besides agricultural machinery, the company manufactures tractor cabins and industrial components.
Turkey is the largest tractor market in terms of production and sales within Europe. During 2009-15, on an average, the tractor market stood at 48,450 units.
Turkey also has a 3 per cent market share in the agri-machinery industry globally. Agricultural mechanisation in Turkey is growing and the country is also an important market for combine harvesters.
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