Source: Financial Chronicle

Erkunt Tractor: M&M to acquire tractor, foundry biz of Turkey's Erkunt for Rs 735 crore

City: PuneWith this buyout, M&M becomes the fourth largest tractor manufacturer globallyMahindra & Mahindra, India's biggest tractor maker by sales, on Wednesday signed pacts to acquire Turkey-based Erkunt Group's tractor manufacturing and foundry businesses for Rs 735 crore in cash.The acquisition is part of Mahindra's plan to double its global revenue to $5 billion by 2019. It is targeting 50 per cent revenues from global markets by 2019 to de-risk the cyclical business.The Mumbai-based auto major will acquire 100 per cent share capital of Erkunt Traktor Sanayii AS for Rs 478 crore ($76 million) and at least 80 per cent of Erkunt Sanayi AS for Rs 257 crore ($41 million), which is the foundry business.Mahindra also said it has an option to acquire 100 per cent of Erkunt Sanayi, which makes iron castings and machined parts for farm, construction and automotive equipment, for Rs 322 crore ($51 million). Both transactions are subject to regulatory and other approvals, and are likely to close by November 30.Mahindra, which is also working on electric tractor, on Tuesday unveiled India's first autonomous tractor in Chennai, which will be sold in the market next year.This latest acquisition gives Mahindra a strategic advantage in Turkey, the gateway to Europe, where it now owns two tractor manufacturers. The Anand Mahindra-led firm forayed into Turkey in January 2017 when it bought a 75 per cent stake in Hisarlar Makina Sanayi ve Ticaret Anonim Sirketi for Rs 110 crore.Significantly, this is Mahindra's second deal in Turkey this year and the third in Europe within a year and a half. With this latest buyout, Mahindra has further expanded its reach and becomes the fourth largest tractor manufacturer globally.In March last year, it had agreed to acquire a 35 per cent stake in Finland-based harves ter maker Sampo Rosenlew Oy for up to $20.5 million.Mahindra said the deals will help it expand its Turkish operations and build an export business, especially in the neighbouring markets of the Middle East, Commonwealth of Independent States and Europe. "Our strategy is to globalise aggressively and also expand our portfolio to include various new categories of tractors and farm machinery," Pawan Goenka, managing director at M&M, said in a statement.Turkey is a very important market in its globali sation journey. Goenkasaid, "the acquisition of Erkunt will enable Mahindra to expand its footprint in the world's fourth largest tractor market."Erkunt Traktor, set up in 2003, sells tractors under its eponymous brand in Turkey and under the ArmaTrac brand in the export markets.Erkunt Traktor firm's sales revenue in 2016 was $88 million, selling around 4,700 tractors that year. It has a wide product portfolio from 55 to 110 HP suitable for diverse farming needs. Exports constituted around 7 per cent of sales. The company has its factory in Ankara, Turkey, and employs around 355 people.Erkunt Sanayi makes engine blocks, cylinder heads and transmission cases, and has a strong customer portfolio including JCB, MAN and Ford. The foundry unit had revenue of $47 million during [email protected]: Michael GonsalvesM&M to acquire tractor, foundry biz of Turkey's Erkunt for Rs 735 crore

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Zeynep Erkunt Armagan's photo - CEO of Erkunt Tractor


Zeynep Erkunt Armagan

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Erkunt Tractor is a manufacturer of farm machinery and equipment.

Erkunt Tractor is a Private company. Zeynep Erkunt Arm...
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