Reports: Continental discussing Modi Tyres share purchase

Various news sources have reported that Continental AG is in advanced talks with Modi Rubber Ltd to buy a majority stake in the Indian company. Citing two people close to the discussions, the Wall Street Journal (WSJ)wrote: “The talks are on between the two groups for an equity stake sale,” quoting and unnamed lender to Modi Rubber.

Modi Tyres Co., a unit of Modi Rubber, has been making Continental-branded truck and bus tyres for the Indian market since 2004. The two companies renewed their partnership in 2009 when they agreed that Modi would initially produce around 1 million Continental-branded cross-ply truck tyres for the Indian market. Production began at the start of June 2009. The collaboration includes a technical cooperation agreement and a license agreement for Continental brand bias tyres. It was agreed that the Continental bias tyres would be distributed via a revived Modi sales network.