New Delhi, Oct. 24: Tractorul SA of Romania may come under the fold of Mahindra & Mahindra before the close of the year.

The tractors and utility vehicles manufacturer’s proposal to buy out the Romanian government’s stake in Tractorul SA has been accepted by the state, Romanian commerce minister Ioan Codrut Seres said here today.

“M&M’s proposal has been accepted by the Romanian government and all formalities will be completed by mid-December,” he told reporters on the sidelines of a conference organised by the Confederation of Indian Industry.

According to Seres, the other bidders, including Romanian conglomerate MYO, for acquiring Tractorul had lost to M&M.

The acquisition of Tractorul will give M&M a strong foothold in European market.

The Indian tractor manufacturer’s bid was shortlisted by the Government of Romania in July this year.

The state-owned tractor major was put back on sale after Italy’s Landini SpA decided against buying the company.

Sources said, the Romanian government has selected M&M for selling its 80 per cent stake in Tractorul after direct negotiations with the bidders.

Earlier this year, M&M had put in a formal bid to AVAS, the government agency in charge of the privatisation process in Romania.

Initially, when the bids were invited, there were three players in the fray. However, M&M is not the only Indian company which has shown interest in acquiring Tractorul. According to reports in the Romanian media, the Tata group had also evinced interest in the company.

Tractorul SA currently has a production capacity of 18,000 tractors a year in the 26-100 HP (horse-power) category. The company’s integrated plant in Brasov also makes 24,000 diesel engines for its tractors and has a casting and forging capacity of 35,000 tonnes and 20,000 tonnes, respectively.

At present, over 7 lakh Tractorul machines are in use, in markets that include Turkey, Egypt and Iran.