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JK Tyre acquires Mexican tyre co for Rs 270cr

J K Tyre has acquired Mexican tyre company, Tornel for Rs 270 crore to become India's fourth largest four-wheeler tyre company. JK Tyres' turnover will now exceed USD 1 billion. The company will fund the acquisition through a mix of internal accruals and debt.

 

This buyout is expected to be completed by the end of May, subject to regulatory approvals. The acquisition makes a strategic fit for JK Tyres as it is already the largest exporter, exporting almost 48% to the North and South American Markets. Mexico-based Tornel offers free access to the NAFTA trade block and Central and Southern America. Therefore, together both the companies would considerably strengthen the market positioning in these territories.

 

RP Singhania, Vice Chairman & MD, JK Tyres, said “We're looking at the Mexican acquisition as a strategic one. Geographically, Mexico is situated very well serving both the North American market as well as the growing and emerging South American and Latin American markets. JK Tyre from India has already been exporting large quantities of tyres to both the North American and South American markets and therefore will be able to strengthen this brand presence through this acquisition and leave a wide foot print in the market.”

 

Tornel has three operating tyre plants with an aggregate capacity of 6.6 million tyres per annum. Tornel has a distribution network of 241 distributors and 282 sales outlets. The turnover of Tornel is USD 202 million, which together with JK Tyre's turnover of USD 800 million will make JK Tyre's combined turnover exceed USD 1 billion.

Source: Money Control

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