Apollo Tyres Ltd has said that it has closed the deal with Sumitomo Rubber Industries (SRI), under which SRI would take over Apollo Tyres South Africa (ATSA), including the Ladysmith passenger car tyre plant and Dunlop brand rights in 32 countries of Africa, for $60 million.
However, Apollo would retain the Durban plant which produces Truck & Bus Radial (TBR) tyres and Off Highway Tyres (OHT) that are used in mining and construction industries.
After this transaction, Apollo Tyres will continue to sell Apollo, Vredestein and Regal branded tyres in Africa.
Both companies would undertake contract manufacturing of their respective brands at each other’s facility to have locally manufactured products available for the market, according to a statement from Apollo Tyres to the stock exchanges.
“It has been a very eventful journey for us in Africa, since our entry in 2006 with the acquisition of Dunlop Tires International. This has given us a sound understanding of the growing African market and helped us develop the market for our products in Latin America as well,” Onkar S. Kanwar, Chairman, Apollo Tyres, said.
Using South Africa as the base, the company will now focus on brands where it has global rights, which Apollo already has been selling in South Africa for the past few years, in the African and Latin American markets, he said.
The employees, retained by Apollo in South Africa, post this closure of transaction will be working for the newly formed company, Apollo Durban (Pty) Ltd. No jobs have been lost in this transaction between the two entities -- Apollo and SRI, he said.
Apollo Tyres had announced this transaction with Sumitomo Rubber Industries on May 29.
The company’s shares ended at Rs 80.95 on the BSE, up 0.62 per cent from the previous close.