Leading automobile
manufacturer in India Mahindra & Mahindra will invest around Japanese Yen 3
billion (USD 25 million / Rs 159 crore approx.) for acquiring 33pc voting stake
in Japan based Mitsubishi Heavy Industries Ltd. (MHI) subsidiary, Mitsubishi
Agricultural Machinery Co. Ltd. (MAM)
As part of a strategic partnership
in the agricultural machinery field, the two companies signed a definitive
agreement.
The acquisition will be done through
fresh issue of common shares and Class A (non-voting) shares of MAM. The deal
is expected to close by October 1, 2015, with the new funding to be used to
increase MAM’s capital base. Said a press release issued by M&M.
Mitsubishi Agricultural
Machinery is a full range agri-machinery company producing and selling
tractors, combine harvesters, rice transplanters and other agri-machinery. It
had revenues of approximately JPY 50 bn (USD 408 mn / Rs 2595 crore approx.) in
2014-15.
The agreement was signed by
Kazuaki Kimura, President and CEO, MHI Machinery, Equipment &
Infrastructure, Katsumi Tottori, President, MAM and Rajesh Jejurikar, President
& Chief Executive (Farm Equipment & Two Wheeler), Mahindra &
Mahindra Ltd.
Commenting on the partnership,
Kazuaki Kimura, President and CEO, MHI Machinery, Equipment &
Infrastructure said “It is an honour for us at Mitsubishi to welcome Mahindra,
who are the largest tractor manufacturer globally by volumes as a partner to
Mitsubishi Agricultural Machinery. Today’s signing will only build upon the
wonderful relationship which both companies have shared for over a decade. I am
sure that the commitment and expertise of both of the companies will open a new
horizon to the business globally.”
Speaking on the alliance,
Rajesh Jejurikar, President & Chief Executive (Farm Equipment & Two
Wheeler Division), M&M said, “It is a matter of pride for us to have signed
this alliance today which is a ‘Win-Win’ for the agricultural machinery
businesses of both companies. This will enable strategic growth avenues for
Mitsubishi Agricultural Machinery (MAM) 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.”
Mahindra is the world’s
largest tractor manufacturer by volume with a very strong leadership position
in India. MAM has been supplying OEM tractors to Mahindra USA (subsidiary of
M&M in the US) as well as providing technical license to Mahindra for
walk-behind rice planters and new tractor in India.
The new partnership will help
both companies to jointly develop products to address global opportunities in
the tractor and agri-machinery space. In addition, the partnership will enable
MAM and Mahindra to improve cost competitiveness though joint procurement and
optimize the supply chain.
Source: Mahindra &
Mahindra