Mahindra buys 100% of Turkish tractor maker Erkunt
20 September 2017
Mahindra & Mahindra (M&M) has acquired a 100-per cent stake in Turkish tractor maker Erkunt Traktor Sanayii and 80 per cent in allied firm Erkunt Sanayii for Rs478 crore, Moneycontrol reports.
The Turkish entity is one of the country's top five tractor makers.
This would be M&M's second tractor acquisition in Turkey this year. In January, it had acquired Turkish company Hisarlar.
Turkey is Europe's largest tractor market and globally commands a 3 per cent market share in the agro-machinery industry. Mahindra is expecting to access the farm equipment market in which Erkunt Traktor operates through this acquisition.
The profit-making Turkish entity earned revenue of 314 million Turkish lira on 4,700 sold tractors in the calendar year 2016.
Erkunt Traktor markets tractors with the brand name 'Erkunt' in Turkey and and exports to the foreign market with under the brand 'Arma Trac'.
The Erkunt Foundry, in which Mahindra has got 80 per cent of the share capital, operates in the casting and machining sector. It has the capability to manufacture engine blocks, cylinder heads, and transmission cases.
The foundry also gets 75 per cent of its revenue from exporting to the European Union, United Kingdom, and some other countries.
The acquisition is part of M&M's plan to double its global revenue to $5 billion by 2019. It is targeting 50 per cent revenues from global markets by 2019.