Mahindra takes majority stake in China's Yancheng Tractor

Anand MahindraMumbai: Mahindra's Farm Equipment Sector, one of the world's top tractor brands and the market leader in India, today signed a joint venture agreement with Jiangsu Yueda Yancheng Tractor Manufacturing Co Ltd, the third largest tractor manufacturer in China.

Mahindra will hold 51 per cent (worth around $26 million) in the joint venture through its subsidiary, Mahindra Overseas Investment Company (Mauritius) Ltd.

Under the agreement, Yancheng Tractors will transfer all tractor related assets and its current liabilities to the joint venture. The joint venture will have net assets of about $50 billion. The transaction is subject to receipt of necessary approvals.

Mahindra has another tractor venture in China, namely, Mahindra China Tractor Company Ltd. (MCTCL).

Yancheng Tractor's Huanghai Jinma brand was the No 3 tractor brand in China in terms of volumes in 2007.

''I have always believed that India and China have unique and complementary strengths, which, when pooled together, can take on the world. We already have a successful joint venture with Jiangling Tractor Company. The JV between M&M and Yancheng Tractor will further combine Indian entrepreneurial and managerial skills with Chinese competitiveness and efficiency. I am sure this formidable combination will contribute substantially towards realising our ambition to be the leading tractor manufacturer in the global market,'' Anand Mahindra, vice chairman and managing director, Mahindra Group, said.