Germany's Continental AG, the world's fourth-largest tyre manufacturer, on Monday announced it had signed an agreement with Modi Rubber Ltd for the 100 per cent acquisition of its tyre subsidiary for an undisclosed amount.
The German tyre major, which has had a relationship with the beleaguered Indian rubber major since 1974, said Modi Tyres Co Pvt Ltd would ultimately become its wholly-owned subsidiary.
The Modi Rubber scrip hit the upper circuit filter after announcement of the news, gaining 10 per cent at Rs.75.35 on the Bombay Stock Exchange.
The scrip had hit a 52-week low of Rs.48 on February 24, after plunging from the year' high of Rs.113.3 just two months earlier.
The completion of the transaction, however, depends on the fulfillment of several conditions, which were not disclosed by either of the two companies.
''This development underlines Continental's commitment to the Indian market and is part of the company's strategy to invest in growing markets in Asia for its core businesses,'' the German tyre-maker said in a statement.