Mahindra & Mahindra has announced the restricting of the brand's farm equipment business in Turkey. The automaker said that its subsidiary Erkunt Traktor Sanayi A.S. (Erkunt), will acquire the Agriculture Machinery business from Hisarlar Makina Sanayi ve Ticaret Anonim Şirketi (Hisarlar). The Indian giant had acquired a 75.1 per cent stake in Hisarlar in 2017 in a bid to foray into the Turkish and European tractor markets. In a reverse deal, Mahindra Overseas Investment Company (Mauritius) Limited (MOICML), and Erkunt have agreed to sell their entire stake of 94.3 per cent in Hisarlar, for an aggregate consideration of Turkish Lira 6.6 million (approx. Rs. 5.6 crore).
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As part of the restructuring process, Mahindra Group will exit Hisarlar's Metal Fabrication business. Meanwhile, Erkunt will acquire the Agricultural Machinery business of Hisarlar, including select related assets, Intellectual Property and Brand use rights. However, 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.
Erkunt Traktor is the fourth largest tractor brand in Turkey
Commenting on the transaction, Hemant Sikka, President, Farm Equipment Sector, M&M 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 of Farm equipment OEM, ensuring that our dealers in Turkey and customers in Europe and other international markets continue to be serviced. It is in line with our capital allocation and in perfect harmony with our purpose of Transform Farming, Enrich Lives."
Mahindra continues to be India's number one tractor maker for over three decades now and is the world's largest tractor maker by volume. The automaker has a presence in over 50 countries globally and is the only tractor brand in the world to win both - Deming Award and the Japanese Quality Medal.
