Mahindra & Mahindra Ltd (M&M) has forayed into the global combine harvester business, agreeing to acquire 35 per cent stake Finnish firm Sampo Rosenlew for €18 million.
The transaction is expected to close by June 30, 2016. There is a lock in period of four years after which M&M may increase its stake.
With this, M&M, a leader in the domestic tractor segment which sells tractors in countries such as China, USA and Japan, will offer new farm machinery to farmers in India and emerging markets and new crops.
ADVERTISEMENT
M&M acquired 33 per cent stake in Mitsubishi Agriculture Machinery Co of Japan last year, which enabled it to enter the business of rice transplanters and harvesters.
Refining strategy
“Now we are refining our strategies. 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,” Pawan Goenka, executive director, said at a press conference,
ADVERTISEMENT
“We see large untapped potential globally and want to create a global footprint. We are very excited about this opportunity,” he said.
Sampo, based in Pori, is known for mid-sized combine harvesters. This family owned company is cash positive and profitable.
The company has been looking for global growth opportunity, which M&M will provide.
“With M&M we have a possibility to grow and make Sampo Rosenlew a truly global player in the agricultural machinery business . This strategic partnership is a natural step towards the world’s fastest growing markets in Asia, Middle East and Africa together with the strongest possible partner,” said Jali Prihti, CEO, Sampo Rosenlew, in a statement.