Apollo Tyres has acquired Dutch-tyre firm Vredestein Banden BV for an undisclosed amount. A profit making subsidiary of Russia’s largest tyre manufacturer Amtel-Vredestein (which went bankrupt last month), Vredestein Banden has an estimated annual revenues of € 300 million
which will make Apollo a Rs 7,200 crore ($ 1.47 billion) company by adding close to one third to its existing topline.
The Dutch firm was under local court administration and following the bankruptcy of its Russian parent Amtel-Vredestein, it has now received all the regulatory approvals for the acquisition.
Renamed as Apollo Vredestein BV Private Ltd, the unit has a production capacity of 5.5 million tyres annually which takes Apollo’s total global (India and South Africa) tyre capacity to 16.8 million. Vredestein is Apollo’s second international acquisition after it acquired Dunlop in South Africa for Rs 290 crore around three years ago.
Apollo Tyres acquired the company through a combination of internal accruals and debt. It was advised by KPMG, Nomura and CMS Derks Star Busmann on the transaction.
Meanwhile, Apollo has deferred its plan to set up a greenfield plant in Hungary with a proposed investment of € 200 million to produce 7 million tyres a year. Onkar Kanwar led Apollo has been facing problems over acquiring land for past two years in Hungary. Instead the latest acquisition in Holland will spearhead its plans for Europe.
Vredestein makes high performance car tyres and supplies to several top-end car makers like Audi and Porsche. Germany accounts for close to one third of its total sales. It also sells tyres in rest of EU, Middle East and the US markets. Its manufacturing unit is located in Enschede close to Amsterdam which currently employs around 1,500 people.