December 7, 2016

India’s Mahindra & Mahindra Ltd. has signed a definitive agreement to acquire a 60 percent stake in the Netherlands-based global fruit distribution company, OFD Holding, through its subsidiary, Mahindra Agri Solutions, for approximately US$5.3 million.

Already a leading grape exporter in India, the deal is a key move by Mahindra toward its strategic goal of becoming a global leader in international sourcing and distribution of grapes. The addition of OFD Holding, which was founded in 2006 as the sales operation of a South Africa producer but has expanded into a global entity, brings with it Origin Fruit Direct in the Netherlands, Origin Direct Asia in China, and Origin Fruit Services South America in Chile, giving Mahindra an expanded sourcing and distribution base on three continents.

“It is a matter of great pride for us that we have entered into a partnership with OFD Holding BV, which takes us closer to achieving our vision of being a significant global player in grapes,” said Ashok Sharma, president – Agribusiness, MD, and CEO, Mahindra Agri Solutions. “We have been working with farmers in India for a very long time and this association will bring in a lot of synergy by giving access to new markets to our farmers. This is in line with Mahindra’s long term vision of Delivering FarmTech Prosperity and will provide our farmers with better returns.”

The deal is also expected to prove beneficial to Mahindra Agri as well, with Origin Fruit’s established distribution networks providing Mahindra’s farmers with greater access to wider global markets. In addition, OFD’s global presence across multiple geographies gives it a year-round presence in the fruit space, eliminating the seasonality that affects other players.

“India is an increasingly important supplier of grapes to our markets and Mahindra is one of the largest exporters, which is giving us access to a growing volume of excellent quality grapes,” said Corné van de Klundert, managing director, OFD Holding BV and Origin Fruit Direct BV. “We are looking forward to intensifying our cooperation with the Mahindra team and the growers, to jointly develop innovations, new markets and customers.”

Mahindra on the Move

Mahindra has had a dynamic few years during which the group has made deals that ensure diversification along multiple agricultural value chains.

In November 2014 the group made its first foray into the dairy sector with an Rs 500 cr (US$80 million) deal to acquire its first dairy processor and a foothold in the country’s $58 billion industry. In October 2015 the group expanded into the agricultural machinery space with the acquisition of a 33% stake in Mitsubishi Agricultural Machinery Co. (MAM) for US$25 million, and more recently the group expanded into the e-commerce space  – Mahindra Univeg – a 60:40 joint venture between Mahindra Agri Solutions and Belgium’s Univeg (Greenyard Foods) – announced an investment in Mera Kisan, an e-commerce startup that sources fresh fruit and vegetables for sale to consumers.

This latest deal for OFD gives Mahindra a stronger standing in a rapidly growing segment of the good and agri space. Global consumption of table grapes has climbed from 15.6 million tons in 2009/2010 to 20.9 million tons in 2015/16, showing six consecutive years of increased consumption and a growth of nearly 34 percent according to Eurofresh Distribution.

Particularly, the deal gives Mahindra great market share in China – the world’s top table grape grower and consumer, responsible for about 46 percent of both production and consumption, and the EU – the world’s top table grape importer.