Apollo completes Dutch firm buy
The country’s largest automotive tyre manufacturer Apollo Tyres Ltd on Monday announced the acquisition of Dutch tyre firm Vredestein Banden for an undisclosed amount. The acquisition will add annual revenues of 300 million euros to Apollo’s topline.business Updated: May 18, 2009 20:27 IST
The country’s largest automotive tyre manufacturer Apollo Tyres Ltd on Monday announced the acquisition of Dutch tyre firm Vredestein Banden for an undisclosed amount. The acquisition will add annual revenues of 300 million euros to Apollo’s topline.
Post acquisition, the firm has been renamed as Apollo Vredestein BV Private Ltd. The two companies would complete their integration process in the next couple of months.
Vredestein Banden was a subsidiary of Russia’s largest tyre manufacturer Amtel-Vredestein, which went bankrupt last month. It was one of the largest tyre manufacturers in Europe with an annual capacity of 5 million. The acquisition takes Apollo’s total global tyre capacity to 16.8 million.
“We wanted an entry into the European market for quite sometime and this acquisition gives us the perfect platform for that,” said Neeraj Kanwar, vice chairman and managing director, Apollo Tyres. "Besides we also get access to Vredestein high-end technology. We will look into all possible avenues for growth of the brand and there will be a healthy co-existence of all our brands in a range of markets.”
The acquisition pushes Apollo's annual turnover to Rs 7,200 crore. The company aims to clock Rs 10,000 crore by 2009-10. The acquisition is being funded through a mix of internal accruals and debt.
The company's plans of setting up a greenfield plant in Hungary with a proposed investment of 200 million euros has been deferred and it would now concentrate on its plans of consolidating its operations in Holland, Kanwar added.
"We have no capex plans for Verdestein yet but the brand stays and so does the management of the company," he said. "There will be no shifting of capacities to India as it remains one of the most profitable auto component makers in Europe with a 8.5 per cent growth.”
Vredestein is Apollo’s second international acquisition after it acquired Dunlop in South Africa for Rs 290 crore around three years ago.
The Dutch firm’s largest market is Germany which accounts for a little less than one third of its total production. Vredestein also caters to the European Union, West Asia and in smaller quantities to the US markets.