27 May 2015, 16:40
Mahindra to take 33% stake in Mitsubishi Agricultural Machinery Partnership to create a win-win for both companies in the Global Agricultural Machinery space
Mitsubishi Heavy Industries Ltd. (MHI) headquartered in Tokyo, and Mahindra & Mahindra Ltd. (M&M), part of the Mahindra Group headquartered in Mumbai, today entered into a strategic partnership in the agricultural machinery field.
Under the definitive agreement signed today, Mahindra will invest JPY 3 bn (USD 25 mn) for acquiring 33% voting stake in MHI subsidiary, Mitsubishi Agricultural Machinery Co. Ltd. (MAM) 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.
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) 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 honor 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.