India’s farming giant acquires majority stake in Turkish company
MUMBAIMahindra & Mahindra Ltd, a part of the $17.8 billion Mahindra Group, has announced it acquired a majority stake in Hisarlar, a farm equipment company based in Turkey, in a bid to expand into the Turkish and European markets.
Under the transaction, which is expected to close by April 2017, Mahindra will acquire a 75.1 percent of equity stake in Hisarlar, the company said in a statement on Jan. 20.
The company did not give the financial details of the transaction, but noted that it would invest 71 million Turkish Liras (equivalent to around $19 million at an exchange rate of 3.8 lira per USD) in Hisarlar as fresh equity infusion into the company, which will give M & M Ltd. a 75.1 percent equity stake.
Mahindra & Mahindra will have the majority on the board and control the management of Hisarlar, following its investment into the company, according to the statement.
As part of the transaction, the European Bank for Reconstruction and Development (EBRD) is increasing its shareholding to 18.7 percent, and will be entitled to nominate a board director, with the founding Türker family retaining a 6.2 percent of stake.
“The association will help in growing the farm equipment business in Turkey and Europe,” said the company, adding that the balance shareholding would be with the EBRD at 18.7 percent, and the Türker family at 6.2 percent.
As part of the transaction, Darby Converging Europe Fund III will terminate its investment, according to the statement.
“Mahindra is the world’s no. 1 tractor company by volume, with an on ground presence in India, U.S., China and Japan, besides many other export markets. Our strategy going forward is to globalize aggressively and also expand our portfolio to include various new categories of farm machinery. This acquisition is an important milestone in our globalization journey,” said Dr. Pawan Goenka, the managing director of Mahindra & Mahindra Ltd.
Hisarlar is a market leader with 45 percent of market share in soil preparation equipment in Turkey, according to the statement.