Apollo Tyres on Monday said it has closed the transaction for sale of South African business along with a passenger car tyre plant to Sumitomo Rubber Industries in a deal valued at $60 million.
In a statement, the company said it has closed the transaction with Sumitomo Rubber Industries (SRI), wherein SRI takes over Apollo Tyres South Africa (ATSA), including the Ladysmith passenger car tyre plant, and the Dunlop brand rights that
Apollo had in 32 countries of Africa for $60 million.
"Apollo retains the Durban plant which manufactures Truck & Bus Radial (TBR) tyres and Off Highway tyres (OHT) used in the mining and construction industries," it added.
Post this transaction, Apollo Tyres will continue to sell Apollo, Vredestein and Regal branded tyres in Africa, and at the same time focus on creating and strengthening its sales and distribution network across the continent.
"As agreed, both companies will also undertake contract manufacturing of their respective brands at each other's facility to have locally manufactured products available for the market," the statement said.
Commenting on the development, Apollo Tyres Chairman Onkar S Kanwar 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, the company will now focus on brands where it owns global rights, which it has already been selling in South Africa for the past few years, for the African and Latin American markets, he added.
The employees, retained by Apollo in South Africa, post this transaction closure, will be working for the newly formed company, Apollo Durban (Pty) Ltd. No jobs have been lost in this transaction between the two entities-Apollo and SRI, the company said.
Apollo Tyres had announced in May this year that it was selling its South African business along with a passenger car tyre plant.
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