M&M buys 75% stake in Turkish farm equipment maker Hisarlar for Rs 130 cr

Mahindra & Mahindra Ltd (M&M) has forayed into Turkey through the acquisition of 75.1 percent stake in Hisarlar Makina Sanayi ve Ticaret Anonim Sirketi - a farm equipment maker - for approximately $ 19 million (about Rs 130 crores). As part of the transaction, Darby Converging Europe Fund II will exit its investment. European Bank for Reconstruction & Development (18.7 percent) and the founder Turker family (6.2 percent) are the other stakeholder in the company.

The acquisition will help M&M to grow its farm equipment business in Turkey and Europe. “Mahindra is the world's leading tractor company by volume, with an on ground presence in India, US, China and Japan, besides many other export markets. 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,” commented Dr Pawan Goenka, managing director, M&M.

Hisarlar has 45 percent market share in soil preparation equipment sector in Turkey - ranked among the largest farm equipment markets globally & the leading tractor market in Europe.

"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," opined Rajesh Jejurikar, president & chief executive, farm equipment & two wheeler, M&M.

Besides agriculture machinery, Hisarlar manufactures tractor cabins and industrial components for off highway machinery. The company recorded revenue of Turkish Lira 208 million (about Rs 370 crores) in 2015 with exports constituting around 35 percent of sales. It has two production facilities in western Turkey and employs about 820 people.

Agricultural mechanisation in Turkey is growing and the country is also an important market for combine harvesters. Apart from some imports in harvesters, farm equipment demand in Turkey is primarily met through domestic production. In addition, a significant proportion of agriculture equipment manufactured in Turkey is exported to Central Asia, the Middle East and Africa.

Mahindra India