MUMBAI — Mahindra & Mahindra said on Wednesday it agreed to acquire Turkey's fourth-largest tractor manufacturer, Erkunt Traktor Sanayii, and an associate company for an enterprise value of $117 million (Rs 735 crore), reports The Economic Times.

Mahindra will acquire 100% of tractor making operations from the Armagan family for $76 million (`478 crore). In Erkunt Sanayi, the foundry business which provides castings to machining services, the Indian company will buy between an 80% and 100% stake for $41 million. The Armagan family holds 35% of the foundry business.

According to the report, this is Mahindra’s second acquisition in Turkey. Earlier in 2017 it had taken over Hisarlar, a implement manufacturer.

The Economic Times reports:

With 70% of the market being dominated by local players in Turkey, Mahindra's rationale is to be local with a local supply chain. Much like its previous acquisitions, Mahindra will allow the current management at Erkunt to run the show, but have a strong representation on its board. Mahindra will act more as a guiding force instead of executing plans. 

The acquisition offers Mahindra a brand that is strong locally with a wide product portfolio and dealer network in Turkey. The availability of a homologated product range, dedicated export brand, access to manufacturing capacity and vendor base in Turkey were big pluses behind taking over Erkunt. The Indian company intends to use Erkunt as a beachhead to enter the Middle East, CIS and North African markets. Erkunt, incorporated in 2003, has a market share of 6% in Turkey, with tractors in the 55-100 horsepower range. 

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