Utility vehicle and tractor major Mahindra & Mahindra is eyeing the Finland-based Valtra Inc as part of its global expansion plans.
Addressing shareholders at the firm's annual general meeting, Anand Mahindra, vice-chairman and managing director of M&M, said: "We want to be a global player. We are looking at various options for expanding the business."
M&M executives refused to divulge details about the proposed acquisition, saying talks were still at a preliminary stage.
If successful, M&M will springboard into the league of the top tractor manufacturers in Europe.
M&M posted a net profit of Rs 42.49 crore (Rs 424.9 million) for the quarter ended June 30, 2003, against Rs 7.79 crore (Rs 77.9 million) in the same quarter last year. Total income (net of excise) increased from Rs 831.48 crore (Rs 8.31 billion) to Rs 1,013.77 crore (Rs 10.14 billion).
The company has entered into a strategic alliance with Mitsubishi Motors for sourcing compact tractors that will be sold in the US under the Mahindra brand. M&M intends to sell 500-700 tractors a year for the next three years under this arrangement.
"We wanted to offer a complete range of products in the US markets. It will take us another two-three years to develop compact tractors," a company executive explained.
The Finland-based Valtra Inc is part of the 5,500 million Kone Corporation, a global services and engineering firm. As part of its restructuring exercise, Kone is seeking new owners for its tractors business as well as for its forest machines business.
Valtra Tractors is the market leader in the Nordic countries and is ranked third in Latin America. With net sales of 762 million in 2002, it has 2,508 employees, including 1,541 in Finland and 710 in Brazil.
M&M recently pulled out its bid for acquiring the state-owned Punjab Tractors. The company intends to retire around Rs 100 crore (Rs 1 billion) of its debt this year. Last year, it retired debt worth around Rs 150 crore or Rs 1.5 billion.
