Mahindra Group to acquire 33% stake in Japan's Mitsubishi Agricultural Machinery

Mahindra & Mahindra Ltd (M&M), part of the Mahindra Group, has agreed to acquire 33% stake in Mitsubishi Agricultural Machinery Co Ltd (MAM), a subsidiary of Japan’s Mitsubishi Heavy Industries Ltd (MHI), for $ 25 million (about Rs 159 crores).
 
The agreement was signed by Kazuaki Kimura, president and CEO, MHI Machinery, Equipment & Infrastructure; Katsumi Tottori, president, MAM; and Rajesh Jejurikar, president & chief executive (farm equipment & two wheeler), Mahindra & Mahindra Ltd. The deal is expected to close by October 1, 2015, with the new funding to be used to increase MAM’s capital base.
 
Mitsubishi Agricultural Machinery is a full range agri-machinery company producing and selling tractors, combine harvesters, rice transplanters and other agri-machinery. It had revenues of approximately Yen 50 billion ($ 408 million) in 2014-15.
 
Commenting on the partnership, Rajesh Jejurikar, president & chief executive (farm equipment & two wheeler division), M&M said, “It is a matter of pride for us to have signed this alliance today which is a ‘win-win’ for the agricultural machinery businesses of both companies. This will enable strategic growth avenues for Mitsubishi Agricultural Machinery (MAM) through Mahindra USA, China and other international markets, thereby speeding up international expansion. It will also provide a platform for both the companies to leverage technology and product development synergies.”
 
Mahindra is the world’s largest tractor manufacturer by volume with a very strong leadership position in India. MAM has been supplying OEM tractors to Mahindra USA (subsidiary of M&M in the US) as well as providing technical license to Mahindra for walk-behind rice planters and new tractor in India.
 
The new partnership will help both companies to jointly develop products to address global opportunities in the tractor and agri-machinery space. In addition, the partnership will enable MAM and Mahindra to improve cost competitiveness though joint procurement and optimise the supply chain.