Apollo Tyres Buys Dunlop International
Apollo Tyres Ltd is to buy Dunlop Tyres International (Pty) Ltd (Dunlop South Africa) for US$62 million. The all-cash deal will see Apollo take on 100 per cent equity for 2.9 billion rupees (£37.3 million). The transaction is subject to regulatory approvals in both countries, including that of the South African Competition Commission, and a number of conditions. The Durban, South Africa-headquartered company also owns subsidiaries in Zimbabwe and the United Kingdom. The news follows speculation that Apollo Tyres was interested in purchasing Dunlop Zimbabwe.
Referring to the acquisition Onkar S Kanwar, chairman and managing director, Apollo Tyres Ltd, said: “We have been in close contact with the Dunlop management for some time and have been very impressed with their range of products and the professional manner in which the company is managed. Their commitment and desire to be a technology-driven force in the international markets is apparent from Dunlop’s people, factories and distribution network. This acquisition opens up new avenues for Apollo Tyres. We will add value to Dunlop South Africa, and the combined entity will become an even stronger force to reckon with in the coming years.”
According to the company, the acquisition of Dunlop South Africa will make Apollo Tyres Ltd the largest Indian tyre manufacturer in terms of size, reach, technology and range of products. It is also the first Indian tyre company to undertake an acquisition abroad. In terms of global ranking in the tyre industry Apollo Tyres is expected to rank 13th or 14th in terms of size. The acquisition is Apollo’s first foray in the global arena and is expected to be the springboard to position Apollo Tyres Ltd as a global player and a base for future growth initiatives
The current management team will continue to run the operations at Dunlop Tyres International (Pty) Ltd with appropriate support from Apollo personnel, in accordance to an agreed integration plan jointly finalised by the managements of the two companies.
Dunlop Tyres International (Pty) Ltd’s three manufacturing units in South Africa and Zimbabwe produce a range of bias and radial products – from high-end truck and bus tyres to industrial, mining and ultra high performance radials.
In addition to tyres made under the world-renowned Dunlop name, Dunlop International is also the manufacturer of high-value brands like Regal and India; has exports to Europe, Central Asia, Australia and South America and has contract manufacturing with key international players.
Dunlop SA has over 230 exclusive multi-brand dealerships called Dunlop Accredited Distributors or DAD across South Africa and Zimbabwe. Through the acquisition, Apollo will also gain a substantial shareholding in National Tyre Services (NTS), Zimbabwe – a major tyre distributor and retreading company. NTS has a technology tie-up with international retreading firm Bandag.