Mahindra & Mahindra (M&M), the country's largest tractor company, has acquired the controlling stake in Punjab Tractors Ltd (PTL), the fourth largest tractor firm, outbidding Hinduja group firm Ashok Leyland.

The acquisition will increase M&M's market share to 40 per cent from 30 per cent now. Chennai-based Tafe is the second largest player with a 23 per cent market share. The other major players include Escorts (13.5 per cent), Sonalika (11 per cent), Ford New Holland (4.5 per cent), John Deere (3.5 per cent) and HMT (1.8 per cent). M&M's global rankings will stay at fourth, after John Deere, AGCO and Case New Holland.

M&M had revised its initial bid of Rs 340 a share to Rs 360, according to a statement from the company.

M&M has acquired the 43.5 per cent stake from private equity fund Actis and the New Delhi-based Burman family.

Post-acquisition, M&M will launch a 20 per cent mandatory open offer for retail shareholders of PTL.

The share prices of PTL went down marginally to Rs 304 in a rising Mumbai market today. Hence, the M&M offer appeared to be at a premium over the ruling market price. The M&M stock went up 1.04 per cent to Rs 765.85.

PTL is jointly promoted by the Punjab State Industrial Development Corporation (PSIDC) and the Central Mechanical Engineering Research Institite.