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Mahindra farm equipment enters Turkey, buys Hisarlar

Staff Writer | January 20, 2017
Mahindra & Mahindra, a part of the $17.8 billion Mahindra Group, announced its foray into Turkey, through the acquisition of Hisarlar Makina Sanayi ve Ticaret Anonim Şirketi (Hisarlar), a farm equipment company based in Turkey.
Acquisition   Mahindra will acquire a 75.1% equity stake
Under the transaction, which is expected to close by April 2017, Mahindra will acquire a 75.1% equity stake in Hisarlar. The association will help in growing the farm equipment business in Turkey and Europe.

The balance shareholding will be with European Bank for Reconstruction and Development (EBRD), 18.7%; and the founding Turker family, 6.2%. Further, as part of the transaction, Darby Converging Europe Fund III will exit its investment.

Hisarlar, incorporated in 1977, is a key player in the agriculture machinery industry, tractor cabins and components for off highway machinery.

The company has been owned primarily by the Turker family with equity participation from Darby, a private equity fund which is part of the Franklin Templeton Group, and the European Bank for Reconstruction and Development (EBRD), a leading institutional investor in Turkey.

The company's revenue in 2015 was 208 million Turkish Lira. Exports constitute around 35% of sales.

The company has two production facilities in western Turkey and employs a total of about 820 people. Hisarlar is the leader in the soil preparation category of implements with a 45% market share in Turkey.

The company has strong brands in this segment, supported by a distribution network of 85 dealers across Turkey.

Besides agricultural machinery, the company manufactures tractor cabins and industrial components.

Turkey is the largest tractor market in terms of production and sales within Europe. During the period 2009-15, on an average, the tractor market stood at 48,450 units.

Turkey also has a 3% market share in the agri-machinery industry globally. Agricultural mechanisation in Turkey is growing and the country is also an important market for combine harvesters.

Apart from some imports in harvesters, farm equipment demand in Turkey is primarily met from domestic production.

In addition, a significant proportion of agricultural equipment manufactured in Turkey is exported to Central Asia, the Middle East and Africa.