JK Tyre to buy Kesoram’s Tyre unit

Automotive India News Bureau:

With the new acquisition, JK Tyre will expand its further expand its Truck and Bus Radial tyre business while also marking entry into the fast growing two and three Wheeler tyre segment.

Indian tyre giant JK Tyre & Industries Limited (JK Tyre) and its Singapore subsidiary JK Asia Pacific Singapore Pte Limited are acquiring a tyre unit of Kesoram Industries Limited (KIL).

Both the JK Tyre entities have signed a binding term sheet with KIL to acquire Cavendish Industries Limited (CIL), which has a tyre manufacturing unit in Haridwar (Laksar). The CIL’s Haridwar production plant produces a range of tyres, tubes and flaps

The value of the deal was known to be Rs 2,200 crore. JK Tyre will own a majority shareholding with substantial management control of CIL with an option to place upto 55 percent with its group companies.

On the acquisition, Dr Raghupati Singhania, Chairman of JK Tyre, said, “The acquisition is a reflection of the inherent strength of JK Tyre in undertaking acquisitions with turnaround potential and successfully delivering results to all the stakeholders in the business.”

JK Tyre and its other group entities will fund the acquisition by combination of debt and internal accruals. The acquisition will prompt  JK Tyre to further expand its Truck and Bus Radial tyre business while also marking entry into the fast growing two and three Wheeler tyre segment.

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