Mahindra Acquires Chinese Tractor Company

The Mahindra Group’s, New Delhi, India, farm equipment arm signed an agreement with one of top three Chinese tractor manufacturers to set up a majority-owned joint venture with an investment of $26 billion, according to Indo Asian News Service.

Mahindra’s Farm Equipment Sector said it has inked a deal with the state-owned Jiangsu Yueda Yancheng Tractor Manufacturing Co Ltd, under which it will acquire its assets and liabilities worth $50 million through a joint venture company.  The Mahindra group will hold 51% stake in the joint venture, through its subsidiary, Mahindra Overseas Investment Co.

This will be Mahindra’s second venture in the Chinese tractor sector after it acquired Jiangling Tractor and set up Mahindra China Tractor Co Ltd.  According to the article, China’s tractor industry has grown at an annual rate of 40% since 2000.  The growth can be attributed to the Chinese government’s new ag policy, as well as more funds for rural economy, raising the income level of Chinese farmers.