Auto major Mahindra and Mahindra (M&M) signed a definitive agreement to acquire 33 percent stake in farm machinery subsidiary of Tokyo-headquartered Mitsubishi Heavy Industries for $25 million (about Rs 158 crore).
"Under the definitive agreement signed, Mahindra will invest $25 million for acquiring 33 percent voting stake in MHI subsidiary, Mitsubishi Agricultural Machinery Company (MAM) Ltd, through fresh issue of common shares and Class A shares of (MAM)," Mahindra said in a BSE filing.
It further said, "The deal is expected to close by October 1, 2015, with the new funding to be used to increase MAM’s capital base."
Rajesh Jejurikar, president and chief executive (Farm Equipment and Two Wheeler Division), Mahindra & Mahindra, said, "This will enable strategic growth avenues for 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."
The company said the partnership will help both the companies 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 through joint procurement and optimise the supply chain," it added.