JK Group to acquire tyre co for Rs 2,200 cr

JK Group to acquire tyre co for Rs 2,200 cr

Laksar (Haridwar) unit of Kesoram in kitty

JK Group  to acquire  tyre co for Rs 2,200 cr

JK Tyre and Industries and JK Pacific Singapore, a wholly owned subsidiary of JK Tyre, have signed a binding term sheet to acquire the Laksar (Haridwar) unit of Kesoram Industries for an enterprise value not exceeding Rs 2,200 crore.

As per the agreement, JK Tyre and JK Pacific Singapore will acquire 100 per cent in Cavendish Industries (CIL), which houses a tyre business undertaking located in Haridwar (Laksar) which manufactures a range of tyres, tubes and flaps.

JK Tyre will hold the largest shareholding block and shall have substantial management control of CIL with an option to place up to 55 per cent with its associates/group companies, JK Tyres said.

“The acquisition is proposed to be funded by a combination of debt and internal accruals raised by JK Tyres and other JK Group entities.

“The financial exposure of JK Tyre in the acquisition is expected to be of the order of Rs 450 crore. The final transaction is expected to be consummated over the next few months with definitive documentation expected to be executed between the parties in due course of time,” JK Tyres said. The acquisition will provide JK Tyre with further impetus towards ready expansion in the truck and bus radials segment as well as entry into the two- and three-wheeler tyre market. The company estimates the transaction to be strategic, revenue accretive and synergistic with its existing tyre business, JK Tyres added.

“The transaction is a reflection of the inherent strength of the company in undertaking acquisitions with turnaround potential and successfully delivering results to all stakeholders in the business. This was recently evidenced by a similar success story in JK Tyre’s acquisition of Tornel, Mexico,” JK Tyre Chairman Raghupati Singhania said.

Turn more tyres 

    JK Tyre and JK Pacific Singapore to buy Kesoram’s unit in Haridwar
    They will acquire 100% in Cavendish Industries 
    Move to push JK Tyre’s prospects in truck and bus tyre segment

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