Mitsubishi Heavy Industries and Mahindra & Mahindra entered into a strategic partnership in the agricultural machinery field. Under the agreement, Mahindra will invest USD 25 million for acquiring 33% voting stake in Mitsubishi Heavy Industries subsidiary, Mitsubishi Agricultural Machinery through fresh issue of common shares and Class A (non-voting) shares of Mitsubishi Agricultural Machinery. The deal is expected to close by October 1, 2015, with the new funding to be used to increase Mitsubishi Agricultural Machinery’s capital base.
Mitsubishi Agricultural Machinery is a full range agri-machinery company producing and selling tractors, combine harvesters, rice transplanters and other agri-machinery. It had revenues of approximately USD 408 million in 2014-15.
Speaking about the partnership, Dr. Pawan Goenka, Executive Director, Mahindra & Mahindra said that Mahindra has had a decade long association with Mitsubishi in USA where their products have played a significant role in Mahindra USA’s success. With this alliance Mahindra and Mahindra will focus on making aggressive investments in marketing and product development and becoming a significant player in the global Agri Machinery Industry.
Mitsubishi Agricultural Machinery has been supplying OEM tractors to Mahindra USA (subsidiary of M&M in the US) as well as providing technical license to Mahindra for walk-behind rice planters and new tractor in India. The new partnership will help both companies to jointly develop products to address global opportunities in the tractor and agri-machinery space. In addition, the partnership will enable Mitsubishi Agricultural Machinery and Mahindra to improve cost competitiveness though joint procurement and optimize the supply chain.