Apollo Tyres to acquire Dunlop South Africa

Our Corporate Bureau
30 January 2006

New Delhi: Apollo Tyres Ltd will acquire the $200 million Dunlop Tyres International (Pty) Ltd (Dunlop South Africa) in an all cash deal for 100 per cent equity worth about Rs 290 crore ($62 million). Dunlop South Africa is an unlisted company, privately-owned by financial investors and management.

The transaction is subject to regulatory approvals in both countries, including that of the South African Competition Commission, and contractual and other conditions precedent to the closing of the transaction. The South African company  has its headquarters at Durban and owns subsidiaries in Zimbabwe and the United Kingdom.

Speaking on 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."

The acquisition of Dunlop South Africa will make Apollo Tyres Ltd the undisputed number one 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.

Apollo Tyres, currently ranked 16th globally, has four manufacturing locations across the country, and Dunlop South Africa is ranked 39th and holds the world record for the fastest land speed for a standard production tyre at 388.5 km/hr in 2002.

The acquisition is Apollo's first entry in the global arena and the company expects it to be a springboard to position Apollo Tyres Ltd as a global player, and a base for future growth initiatives. Dunlop Tyres International (Pty) Ltd's three manufacturing units in South Africa and Zimbabwe produce the entire range of bias and radial products - from high-end truck and bus tyres to industrial, farm, light truck, off-road and mining tyres, high-speed passenger car radials and ultra high performance car tyres.