The Telegraph
Since 1st March, 1999
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Mahindras in race for Finnish tractor maker

Mumbai, Aug. 18: Mahindra & Mahindra (M&M) plans to buy Valtra, a Finnish tractor major in a deal — worth Rs 1,750 crore to Rs 2,250-crore — that could turn it into a global tractor powerhouse.

The Helsinki-based Valtra, popular in the European markets, is the culmination of Mahindras’ mission to carve a global market for their tractors to beat drought-scorched sales at home.

The planned buyout also explains why the company hung up on Punjab Tractors, the country’s second-largest tractor maker snapped up by CDC in a bidding ballyhoo that petered out with a solitary suitor. The Mahindras, rooting for a target bigger than Punjab Tractors, saved their resources.

In a letter sent to stock exchanges today, M&M said it would bid for Valtra, owned by Finnish engineering giant Kone.

“The directors will meet on August 21 to consider a bid for Valtra’s Finnish and Brazilian operations, Valtra Oy Ab and Valtra do Brasil,” the company told the Bombay Stock Exchange.

With a turnover of Rs 4,500 crore, Valtra could give Mahindra & Mahindra a beachhead in Europe and Latin America, where the Finnish tractor firm is the third largest.

Chairman Keshub Mahindra had indicated at a recent annual general meeting that talks with Valtra were under way.

“Yes, we are looking at it. But I can’t tell you more at this point because things are at a preliminary stage,” Mahindra had said.

M&M drove into the US with an alliance that allowed it to sell Mitsubishi Tractors under its own marque. The first Indian tractor maker to glide across the Atlantic, the Mahindras tapped into the market for low horse-power engines not offered by the bevy of US and European firms already there.

The company’s global ambitions coincide with a rebound it has been attempting for months at home. It streamlined its business during the recession, setting up assembly units in key areas of the north and south.

M&M’s first-quarter net profit zoomed 450 per cent to Rs 42.50 crore against Rs 7.80 crore same time last year.

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