M&M to buy stake in Mitsubishi Heavy's farm machinery unit

To buy 33% stake in the unit for $25 million

Vehicle maker Mahindra and Mahindra Ltd said on Thursday it would buy a 33% voting stake in the agricultural machinery-making unit of Mitsubishi Heavy Industries Ltd for $25 million.

The investment is being made through the issue of common shares and class A non-voting shares of Japan's Mitsubishi Agricultural Machinery Co Ltd, and the deal is expected to close by Oct 1, the companies said in a joint statement.

Mitsubishi Agricultural makes farm equipment such as tractors, power tillers, rice planters and combine harvesters for sale globally. It brought in about $408 million in revenue for the fiscal year 2015.

Mahindra, which is the world's largest maker of tractors by volume, said the deal would help both companies cut cost and improve their supply chain.