Mumbai, June 23 (UNI) JK Tyre and Industries Limited today announced acquisition of Tornel, a Mexican Tyre company, along with its subsidiaries for Rs 270 crore, through a Special Purpose Vehicle (SPV) route.
The acquisition has been financed through a combination of equity and debt. The Board had approved this acquisition in its meeting held on April 11, 2008. All formalities and compliances with regard to the acquisition has been made and closing of the transaction has taken place on June 13, in Mexico. Tornel has now become a subsidiary of JK Tyre and Industries, the Company said in a release here.
JK Tyre will substantially increase its global foot print with this acquisition. Strategic location of Mexico offers Tornel free access to the NAFTA trade block and emerging economies of Central and Southern America. Over the years, JK Tyre has been exporting tyres to these markets in large volumes. Tornel has a wide distribution network of 241 distributors and 282 sales outlets, across Mexico.
Situated in Azcapotzalco, Tultitlan and Hidalgo, the three plants of Tornel employs 2,000 people. Tornel has state-of-the-art laboratories and Technology Development Center, to develop and manufacture competitive products for demanding North and South American markets. The Company manufactures wide range of Bias and Radial Tyres -- from Truck, LCV, Farm and Industrial tyres in Bias category, to LCV and High performance Passenger Car tyres in Radial category. It also sells Truck Radials by outsourcing. JK Tyre plans to enhance and improve the operations of Tornel, by providing technological and managerial inputs.
Post acquisition, collective capacity of JK Tyre has risen to 940 tonnes per day, with Tornel's production capacity of 290 tonnes per day along with JK Tyre's capacity of 650 tonnes per day, at its four plants in India. This makes JK Tyre, India's largest four wheeler tyre company.
JK Tyre Vice Chairman and Managing Director Dr R P Singhania said the acquisition was the first international one for the Company and there were multi-facet synergies between JK Tyre and Tornel.
''Economies of scale, technological expertise and wider understanding of different markets, will propel the Company to higher level of growth. We take pride in our operational practices at JK Tyre and are confident of implementing them in Mexico. Imminent forays into newer markets will not only drive our growth, but also provide us sustainable competitive advantage,'' he said.
UNI VK RN AG1820