Apollo Tyres closes its South African deal with Sumitomo Rubber Industries
Apollo Tyres had announced in June 2013 that they were selling the Dunlop brand in South Africa to Japanese based Sumitomo Rubber Industries (SRI). Earlier this week, Apollo revealed that the deal has now been completed and the Dunlop brand rights for 32 countries in Africa now rest with SRI. As part of the $60 million deal Sumitomo Rubber Industries has also acquired Apollo's Ladysmith passenger car tyre plant. Meanwhile Apollo retains its truck and bus radial tyre manufacturing Durban unit. Apollo Tyres had acquired Dunlop Tyres International Ltd (South Africa) in 2006 for $64.4 million in an all-cash deal.
Onkar Kanwar, chairman and Neeraj Kanwar, vice chairman & MD of Apollo Tyres
After sealing the agreement, the Indian company said that they will continue selling Vredestein, Apollo and Regal tyres in Africa. They also will be focussing on the distribution and sales network. Further, Apollo and SRI will be contract manufacturing tyres at each other's facilities for local consumption. Apollo has also clarified that all its employees in South Africa have been retained post the deal. The newly formed company is called Apollo Durban (Pty) Ltd.
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."
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