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Mahindra & Mahindra Ltd.’s farm equipment division has forayed into the European market with the acquisition of Turkey-based Hisarlar. M&M bought a controlling 75.1 percent stake in the farm equipment maker for $19 million (nearly Rs 130 crore).
Hisarlar issued fresh shares to M&M, which translated into an equity investment of $19 million into the Turkish company, said Pawan Goenka, managing director of the Indian automotive major. M&M hopes to leverage not only Turkey, but other European markets through Hisarlar.
Goenka said he saw immense potential and opportunity in the global farm equipment market and M&M planned to globalise “aggressively”.
Hisarlar Makina Sanayi ve Ticaret Anonim Sirketi has a 45 percent market share in the Turkish farm equipment sector, with several patents to its name. M&M plans to tap the patents while expanding its operations in Europe and the Commonwealth of Independent States (CIS), said Rajesh Jejurikar, president and chief executive of M&M’s farm equipment and two-wheeler divisions.
Hisarlar is a market leader with a 45 percent market share in soil preparation equipment in Turkey. 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.
Rajesh Jejurikar, President and Chief Executive, Farm Equipment & Two-Wheeler Business, Mahindra & Mahindra
Among other products, Goenka said, M&M would look at using Hisarlar’s expertise to bring cabin-assisted tractors into India, a common sight in Europe but hasn’t found its way into India.
Future investments into global operations via Hisarlar, if at all, are likely to be debt-based and for operations beyond the scope of the current deal, Goenka said.
The Mumbai-based company also plans to launch the Mahindra brand of tractors in Turkey, the world’s fourth-largest market for the sector, said Jejurikar.
M&M claims 37 percent of its farm equipment business comes from its overseas operations and plans to expand it further. The company had acquired Brazilian tractor distribution firm Bramont Montadora Industrial e Commercial de Veiculos S.A. in September 2016, and Jejurikar said M&M plans to soon launch a new line of tractors in the South American nation.