The transaction will see Mahindra retain its core business of agricultural machinery and IP.
Mahindra & Mahindra has announced that its subsidiary Erkunt Traktor Sanayi (Erkunt), will acquire the agriculture machinery business from Hisarlar Makina Sanayi ve Ticaret Anonim Şirketi (Hisarlar), also a subsidiary of the company.
In a reverse deal, Mahindra Overseas Investment Company (Mauritius) (MOICML), a wholly-owned subsidiary of the company, and Erkunt have agreed to sell their entire stake of 94.3% in Hisarlar, for an aggregate consideration of Turkish Lira 6.6 million (Rs 5.6 crore).
As part of the restructuring its subsidiaries in Turkey, Mahindra Group will exit Hisarlar’s Metal Fabrication business. While Erkunt will acquire the Agricultural Machinery business of Hisarlar, including select related assets, intellectual property and brand use rights.
Mahindra Group, through Erkunt, will continue to stay invested in the core business of agricultural machinery products ranging from soil tillage to post harvest segments. In addition, Erkunt will acquire select cabin manufacturing assets of Hisarlar.
Commenting on the transaction, Hemant Sikka, President, Farm Equipment Sector, Mahindra & Mahindra said, “Through this transaction, we have retained the core business of agricultural machinery and all the IP built over the years. This makes Erkunt Traktor a full-range farm equipment OEM, ensuring that our dealers in Turkey and customers in Europe and other international markets continue to be serviced."
Mahindra says it will continue to establish itself as a global tractor maker with a full line of farm machinery business through acquisitions and new manufacturing units, underpinned by the requisite brand and sales infrastructure as well as a leveraging its global network for product development.
Mahindra is India's leading tractor brand and the world’s largest tractor manufacturer by volumes and has a presence in over 50 countries It is also the only tractor brand in the world to win both the Deming Award and the Japanese Quality Medal.
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