M&M to buy 33% in Mitsubishi Agri Machinery for $25 million
M&M will acquire the stake through a fresh issue of common shares and non-voting or Class A shares, the company said, adding the deal will be closed by 1 October. Photo: Bloomberg
Mumbai: Mahindra and Mahindra Ltd (M&M) on Thursday said it will buy 33% stake in Japan’s Mitsubishi Agricultural Machinery Co. Ltd for ¥3 billion ($25 million). In a stock exchange notice, M&M said the two companies will jointly develop products such as tractors and farm equipment.
M&M will acquire the stake through a fresh issue of common shares and non-voting or Class A shares, the company said, adding the deal will be closed by 1 October.
“This will enable strategic growth avenues for Mitsubishi Agricultural Machinery through Mahindra USA, China and other international markets thereby speeding up international expansion. It will also provide a platform for both the companies to leverage technology and product development synergies,” said Rajesh Jejurikar, president and chief executive (farm equipment and two-wheeler division), M&M.
Mitsubishi Agriculture, which is a subsidiary of Mitsubishi Heavy Industries, makes tractors, harvesters and transplanters. Besides Japan, it is present in several southeast Asian countries and the US, and had a turnover of $408 million in 2015. M&M is India’s leading farm equipment and tractor maker.
At 11am, M&M shares were up 0.34% to Rs.1,255.95 on the BSE, while the benchmark Sensex was down 0.24% to 27,783.25 points.