M&M to acquire 35% in European harvester maker Sampo Rosenlew
31 March 2016
Mahindra & Mahindra (M&M) has entered into an agreement to acquire a 35-per cent stake in Sampo Rosenlew, a combine harvester company based in Pori, Finland.
Though M&M did not disclose the value of the transaction in its regulatory filing, various media reports put the deal size at €18 million.
The transaction is expected to close by 30 June 2016, M&M said, adding this also marks its entry into the global combine harvester business by entering into a strategic partnership with Sampo Rosenlew.
The two companies will work in tandem to grow their combine harvester business globally.
"Today, Mahindra is the world's leading tractor company by volume, with an on ground presence in India, USA, China and Japan,besides many other export markets. We are now putting in place a strategy to build a full product line of farm equipment that goes beyond tractors and with this we will compete globally in both advanced and developing markets," said Pawan Goenka, executive director at M&M.
Sampo Rosenlew is a European combine harvester company, known globally for its mid-sized combine harvesters. In FY2014-15 Sampo Rosenlew had a standalone revenue of Euro 93 million.
It also has a joint venture partner in a combine harvester company in Algeria, with revenues of €45 million in FY2014-15. Further, it has built a significant business in its core markets of Europe, Eurasian countries and North Africa.
Sampo Rosenlew, a family-owned company, employs about 450 people and has a turnover of Euro 93 million. The company's main products are combine harvesters and forest harvesters with combine harvesters accounting for nearly 70 per cent of net sales. Sampo Rosenlew currently sells its machines to over 50 countries and exports approximately 90 per cent of its products. The main markets are Europe, CIS countries and North Africa.
''Sampo Rosenlew will enable Mahindra to grow in the global combine harvester business. The two companies will work closely towards taking Sampo's combine harvesters to new markets globally, including India," said Rajesh Jejurikar, president and chief executive, farm equipment and two wheeler at M&M.
Together with its existing strategy in the core markets, Sampo Rosenlew will also develop a new range of combine harvesters for developing markets and for specialty crops.
Mahindra and Sampo Rosenlew will jointly focus on the combine harvester business in Asia, Africa and Eurasian Economic Union countries.