Apollo Tyres today announced the closure of the transaction with Sumitomo Rubber Industries (SRI), where in SRI takes over Apollo Tyres South Africa (ATSA) including the Ladysmith passenger car tyre plant, and the Dunlop brand rights that Apollo had in 32 countries of Africa, for US$ 60 million. Apollo retains the Durban plant which manufactures Truck & Bus Radial (TBR) tyres and Off Highway tyres (OHT) used in the mining and construction industries.
Post this transaction, Apollo Tyres will continue to sell Apollo, Vredestein and Regal branded tyres in Africa, and at the same time focus on creating and strengthening its sales and distribution network across the continent. As agreed, both companies will also undertake contract manufacturing of their respective brands at each other’s facility to have locally manufactured products available for the market.
Commenting on the closure of this transaction with Sumitomo Rubber Industries, Onkar S Kanwar, Chairman, Apollo Tyres Ltd said,
“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 very sound understanding of the growing African market and helped us develop the market for our products in Latin America as well. Using South Africa as the base, we will now focus on brands where we own global rights, which we have already been selling in South Africa for the past few years, for the African and Latin American markets.”
The employees, retained by Apollo in South Africa, post this transaction closure, 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.
Apollo Tyres announced this transaction with Sumitomo Rubber Industries on May 29, 2013.