EBRD increases stake in Turkish agricultural machinery firm Hisarlar, January 2017
20 January 2017
The European Bank for Reconstruction and Development (EBRD) is increasing its stake in Hisarlar, the Turkish producer of tractor cabins and agricultural machinery, as the multinational automobile manufacturing corporation Mahindra & Mahindra Ltd (Mahindra) becomes controlling shareholder in the company.
The EBRD is taking its total shareholding in the company to 18.7 per cent while the India-based Mahindra is investing 71 million Turkish lira (USD 19 million equivalent) in a 75.1 per cent stake. This is Mahindra’s first investment in the Turkish market as part of the corporation’s global expansion strategy.
Hisarlar is a leading producer of agricultural machinery in Turkey and has a 45 per cent share of the local market. It was founded in 1977 by the Turker family which retains a 6.2 per cent stake following this transaction.
Zafer Turker of Hisarlar said: "Mahindra is the world’s number one tractor company by volume, with an on-ground presence in India, the USA, China and Japan, and many other export markets. We at Hisarlar welcome them to Turkey. I am confident that Hisarlar will benefit from Mahindra’s global reach and expertise and we will jointly expand our portfolio to include various new categories of farm machinery. This acquisition is an important milestone in our journey and we are pleased to have Mahindra as our partners.”
Rajesh Jejurikar, President and Chief Executive, Farm Equipment and Two Wheeler, Mahindra & Mahindra Ltd, said: “It is a very proud moment for us at Mahindra to be associated with Hisarlar who are a market leader in soil preparation equipment in Turkey. The partnership with Hisarlar will be one of mutual regard and respect and we at Mahindra are committed to the development of the Turkish industry. Our partnership will help us expand our footprint in Turkey and Europe, making this entity a global manufacturing base for various farm implements and tractor cabins. I am particularly keen to take some of Hisarlar’s world class products across the globe where it will make an immediate impact with its target audience.”
The Mahindra Group is a USD 17.8 billion federation of companies with a leadership position in utility vehicles, information technology, financial services and vacation ownership in India and is the world’s largest tractor company by volume. It also enjoys a strong presence in aerospace, agribusiness, components, commercial vehicles, consulting services, defence, energy, industrial equipment, logistics, real estate, steel and two wheelers. Headquartered in India, Mahindra employs over 200,000 people across 100 countries.
Jean-Patrick Marquet, EBRD Managing Director for Turkey, said: “The EBRD is committed to attracting foreign direct investment to Turkey, particularly at this challenging juncture. As a shareholder in Hisarlar we are pleased to partner with Mahindra & Mahindra. The Bank is confident in the potential of this partnership and is increasing its stake. This step will take Hisarlar to the next level, bringing innovation and know-how to the manufacturing of farm equipment in Turkey.”
The EBRD first invested in a 7.14 per cent stake in Hisarlar in 2013. With the increased stake the Bank will be entitled to nominate an independent director to join Hisarlar’s board of directors.
Boosting competitiveness of Turkish companies is among the EBRD’s priorities in Turkey. The country is a top destination for the Bank’s finance, with EUR 1.9 billion invested in 2016 alone. To date the Bank has invested over EUR 8 billion in Turkey through more than 200 projects across sectors and has mobilised nearly EUR 20 billion for these ventures from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector.