a 75.1% equity stake in Turkey-based Hisarlar
Makina Sanayi ve Ticaret Anonim Şirketi
Turkey; ranks amongst the largest farm equipment markets globally
January 20, 2017: Mahindra
& Mahindra Ltd (M&M Ltd), a part of the USD 17.8 billion
Mahindra Group, headquartered in Mumbai, India, today announced its
foray into Turkey, through the acquisition of Hisarlar
Makina Sanayi ve Ticaret Anonim Şirketi (Hisarlar),
a farm equipment company based in Turkey.
the transaction, which is expected to close by April 2017, Mahindra
will acquire a 75.1% equity stake in Hisarlar. The association will
help in growing the farm equipment business in Turkey and Europe. The
balance shareholding will be with European Bank for Reconstruction
and Development (EBRD), 18.7%; and the founding Turker family, 6.2%.
Further, as part of the transaction, Darby Converging Europe Fund III
will exit its investment.
on the development, Dr.
Pawan Goenka, Managing Director, Mahindra & Mahindra Ltd. said
"Mahindra is the world's No 1 tractor company by volume, with an
on ground presence in India, USA, 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"
Jejurikar, President and Chief Executive, Farm Equipment & Two
Wheeler, M&M Ltd. said,
"Hisarlar is a market leader with 45% market share in soil
preparation equipment in Turkey. 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".
Hisarlar Makina Sanayi ve Ticaret Anonim Şirketi
incorporated in 1977, is a key player in the agriculture machinery
industry, tractor cabins and components for off highway machinery.
company has been owned primarily by the Turker family with equity
participation from Darby, a private equity fund which is part of the
Franklin Templeton Group, and the European Bank for Reconstruction
and Development (EBRD), a leading institutional investor in Turkey.
company's revenue in 2015 was 208 million Turkish Lira. Exports
constitute around 35% of sales. The company has two production
facilities in western Turkey and employs a total of about 820 people.
Hisarlar is the leader in the soil preparation category of implements
with a 45% market share in Turkey. The company has strong brands in
this segment, supported by a distribution network of 85 dealers
agricultural machinery, the company manufactures tractor cabins and
industrial components. Turkey is the largest tractor market in terms
of production and sales within Europe. During the period 2009-15, on
an average, the tractor market stood at 48,450 units. Turkey also has
a 3% market share in the agri-machinery industry globally.
Agricultural mechanisation in Turkey is growing and the country is
also an important market for combine harvesters.
from some imports in harvesters, farm equipment demand in Turkey is
primarily met from domestic production. In addition, a significant
proportion of agricultural equipment manufactured in Turkey is
exported to Central Asia, the Middle East and Africa.
Mahindra & Mahindra Ltd. will invest 71 million
Turkish Lira (equivalent to around USD 19 million at an exchange rate
of 3.80 Turkish Lira per USD) in Hisarlar as fresh equity infusion
into the company, which will give M & M Ltd. a 75.1% equity
stake. Mahindra & Mahindra will have majority in the board and
control the management of Hisarlar, post its investment into the
company. As part of the transaction, EBRD is increasing its
shareholding to 18.7%, and will be entitled to nominate a Board
Director, with the founding Turker family retaining a 6.2% stake.
Mahindra Group is a USD 17.8 billion federation of companies that
enables people to rise through innovative mobility solutions, driving
rural prosperity, enhancing urban living, nurturing new businesses
and fostering communities. It has a leadership position in utility
vehicles, information technology, financial services and vacation
ownership in India and is the world's largest tractor company, by
volume. It also enjoys a strong presence in aerospace, agribusiness,
components, commercial vehicles, consulting services, defence,
energy, industrial equipment, logistics, real estate, steel, and two
wheelers. Headquartered in India, Mahindra employs over 200,000
people across 100 countries.