KKR & Co in initial talks to sell majority stake in Alliance Tire Group
08 Feb 2016
US private equity firm Kohlberg Kravis Roberts & Co (KKR & Co) is in initial talks to sell its majority 90 per cent stake in specialist tyre maker Alliance Tire Group (ATG) valued at around $1.5 billion
Japan's Sumitomo Group, Germany's Continental Tires and France's Michelin Group have been sounded out as have some PE-led consortia, The Economic Timers today reported, citing unnamed sources.
A successful deal would see KKR exit with a 30-per cent internal rate of return, the report said.
Alliance Tyre, the world's fifth largest, off-highway tyre maker, was founded in Israel in 1950. In the early '60s. It started manufacturing front and rear diagonal tractor tyres and in the early '80s, Alliance designed and manufactured its first radial tractor series of tires.
In 2007, Indian tyre veteran Ashok Mahansaria and his son Yogesh Mahansaria acquired Israel-based Alliance Tyre with the backing of private equity firm Warburg Pincus.
In 2013, KKR & Co acquired Warburg Pincus's 80-per cent stake in ATG for a reported $500 million.
The Mumbai-based company now specialises in manufacturing agricultural, forestry, industrial and OTR tires worldwide through its three well-known brands - Alliance, Galaxy and Primex.