M&M gains over 1% on acquisition of Erkunt Traktor and Erkunt Foundry in Turkey

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Mahindra and Mahindra share price gained over a percent on acquisition of two companies in Turkey.

“We have signed share purchase agreements for acquiring 100 percent share capital of Erkunt Traktor Sanayii AS and at least 80 percent share capital of Erkunt Sanayi AS,” the tractor major said in its filing.

The second agreement included approximately 35 percent share capital of Erkunt Sanayi AS, which is held by Erkunt Traktor Sanayii AS.

Erkunt Traktor Sanayii AS sells tractors in Turkey under ‘Ekrunt’ brand and exports the same udner ‘Arma Trac’ brand name.

In FY16, it sold approximately 4,700 tractors and recorded a revenue of around 314 million Turkish Lira.

Mahindra & Mahindra said its wholly owned subsidiary Mahindra Overseas Investment Company (Mauritius) would acquire 100 percent share capital of Erkunt Traktor for 478 crore and 80 percent share capital of Erkunt Foundry for Rs 257 crore.

Erkunt Traktor Sanayi AS is known as Erkunt Traktor while Erkunt Sanayi AS is known as Erkunt Foundry.

Erkunt Foundry operates in casting and machining industry.

The acquisition would provide M&M access to Turkish agricultural machinery market, the fourth largest tractor market globally.

The company is expected to close both transactions by November 30, 2017.

At 14:02 hours IST, the stock price was quoting at Rs 1,296, up Rs 1.95, or 0.15 percent on the BSE.

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