M&M enters Turkey, buys farm equipment company Hisarlar

Varun Aggarwal Mumbai | Updated on January 12, 2018 Published on January 20, 2017

22/04/2010 MUMBAI: Mr. Rajesh Jejurikar, Chief Executive, Automotive Division, Mahindra & Mahindra addressing a press conference held in Mumbai on April 22, 2010. Photo: Paul Noronha

Will launch some of the equipment made by the Turkish firm in India

Mahindra & Mahindra is taking its global ambition to the next level as it enters Turkey by acquiring 75.1 per cent stake in farm equipment company Hisarlar Makina Sanayi ve Ticaret Anonim Şirketi, or Hisarlar in short, for about $19 million.

“The acquisition has two strategic objectives. First, it’ll give us access to Europe and CIS markets. Second, with Hisalar’s large dealer network in Turkey, we’ll be able to create a brand for M&M which will help us eventually launch our tractors in the market,” Rajesh Jejurikar, President and Chief Executive, Farm Equipment & Two Wheeler, M&M told BusinessLine.

Jejurikar said M&M will launch some of the equipment made by Hisarlar in India, the US and other global markets, especially tractor cabins, which are increasingly in demand in India.

Despite Turkey being part of the Syrian war at the moment, Jejurikar said the farm equipment market is still largely unaffected.

“It is normal life in Turkey. We’ve been travelling to and fro from the country without any issues and we see no impact from major world events or any major security concerns in the country,” he said.

When asked about the time of M&M’s global expansion given the increasing protectionist environment around the world, Jejurikar said, “This is the new world order. We will have to wait and watch how things pan out.”

Beyond Turkey, M&M is betting big on Brazil where it plans to launch several new products this year.

The company is also planning to enter Egypt this year, Jejurikar said. Hisarlar is a key player in the agriculture machinery industry, tractor cabins and components for off highway machinery in Turkey with exports constituting around 35 per cent of its sales.

Hisarlar is the leader in the soil preparation category of implements with a 45 per cent market share in Turkey.

The company has strong brands in this segment, supported by a distribution network of 85 dealers across Turkey.

Apart from M&M’s 75.1 per cent stake in Hisarlar, 18.7 per cent shareholding will be with European Bank for Reconstruction and Development (EBRD) and 6.2 per cent with the founding family.

Further, as part of the transaction, Darby Converging Europe Fund III will exit its investment.

Commenting on the development, Pawan Goenka, Managing Director, Mahindra & Mahindra said, “Mahindra is the world’s No 1 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.”

The sell side of the deal was done by mid-market investment banking firm Singhi Advisors along with its merger alliance partner in Turkey, Odin Financial Advisors.

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Published on January 20, 2017
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