Apollo Tyres Battling To Acquire Kumho Tire In A $900 Million Deal

India’s leading tyre maker, Apollo Tyres is in a contest to acquire South Korea’s second largest tyre manufacturer, Kumho Tire in a 900 million USD deal. The Gurugram based tyre company makes its place among the four suitors shortlisted for this multi-million dollar bid. Out of the four competitors, two are Chinese rivals Shandong Linglong Tyre and ChinaChem, while the third is supposed to be French tyre magnate Michelin. If the Indian tyre firm is able to seal the deal it will make it stand amid the top seven tyre makers with a strong presence in the US and European tyre markets. After a gap of two years, Apollo Tyres is in the battleground again hunting for acquisition, as earlier it had a failed bid attempt of 2.5-billion USD to buy Cooper Tire of the US.

The share sale procedure for the 42% controlling stake is in a decisive phase and is set-off by a group of creditors that took over seven years ago. The auction process for the creditors, which includes Woori Bank (which owns 14.2%), Korea Development Bank (13.5%) and KB Kookmn Bank (4.2%) is administered by the Swiss multinational financial services company, Credit Suisse Group.

As per the sources, Apollo Tyres has been in talks with many global banks to channel the financial proceedings. In the meantime, Kumho Tire board has stretched the cut-off date for the final bids to Monday from earlier Friday. Other tyre moguls that have showcased curiosity, before withdrawing their names, in the Kumho acquisition comprise of Japan’s Yokohoma, Goodyear Tire of the US and Germany’s Continental AG.

Apollo Tyres representatives are tight-lipped about the deal, while queries with Kumho, Michelin, ChinaChem and Shandong Linglong are going unattended. The share sale plan was made public by Kumho’s chief creditors last week via an exchange notification.

An investment banker highlighted the fact that the Chinese companies are prime contenders for the tyre company deal as they are very aggressive in such dealings. Recalling the earlier similar deal in 2015 of Pirelli brand that was surprisingly brought by ChinaChem for 7.7 billion USD, leaving global tyre firms stunned, he stated that this time too Chinese may bid aggressively.

Author: Ankit verma

My need for speed began at a very early age and I realised this as soon as I got my first bicycle at the age of 8. When all the other kids would break downhill I would pedal harder just to go faster and enjoy the thrill. Adding to my interest for speed, I grew engrossed in the working mechanics of two wheelers thanks to my father as he is a hydraulic mechanic and would take me along with him on his repair sessions. Eventually I became familiar with the tools and basic technical concepts of two wheelers.Super sport and sport tourers are more of my liking and the sparks to these flames were ignited the first time I experienced the maddening power of a Yamaha YZF R1. I was just 14 years old at the time and got to ride as a pillion with an older acquaintance. This one short ride influenced my every decision in terms of the bikes I want to own. As of today I’m 26 years old and a proud owner of a Yamaha Fz15 version 2.0 and a Kawasaki Ninja 650 2014 model having clocked a decent 30k Kms only while touring, waiting to clock 1000s more as riding makes me feel whole again after enduring the dismal routines of life. Read more