M&M acquires 35% in Finnish co, enters combine harvester biz

New Delhi: Mahindra & Mahindra has acquired 35 percent stake in Finland's Sampo Rosenlew for up to 18 million euros (about Rs 135 crore), marking its foray into the combine harvester business.

The deal is expected to close by June 30, 2016.

"The acquisition of up to 35 percent stake would be for a consideration of not exceeding 18 million euros," Mahindra & Mahindra (M&M) said in a regulatory filing today.

Both will work in tandem to grow their combine harvester business globally, it added.

"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 of M&M.

At present, Mahindra is the world's leading tractor company by volume, with an on ground presence in India, the US, China and Japan, besides many other export markets.

M&M Farm Equipment and two-wheeler President and Chief Executive Rajesh Jejurikar said: "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."

In 2014-15, Sampo Rosenlew had a standalone revenue of 93 million euro. The company is also joint venture partner in a combine harvester company in Algeria which had a revenue of 45 million euro in the same year.

Further, it has built a significant business in its core markets like Europe, Eurasian countries and North Africa.

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, M&M said.

"Mahindra and Sampo Rosenlew will jointly focus on the combine harvester business in Asia, Africa and Eurasian Economic Union countries," it added.

M&M shares were trading 0.76 percent down at Rs 1,210.95 apiece during afternoon session on the BSE.