In one of the major acquisitions in the country?s tyre business, leading international automotive parts supplier Continental has acquired Modi Tyres, a subsidiary of Delhi-based Modi Rubber. The acquisition is going to give Continental a burgeoning automotive market which has grown the fastest at 18% in the first five months of the calendar year.
Modi Tyres which is a mid-sized tyre maker had announced on Friday that it had started the process to transfer the entire 5.6 crore shares to the Hanover-based company for about R117.6 crore. Following the news, Modi Rubber’s share price rose 5% on the Bombay Stock Exchange in the morning hours of trading to close at R63.20.
?The new entity will focus on local production and distribution of bias and radial truck and bus tyres as well as radial passenger car tyres for the Indian market,? a company statement said on Monday. According to a member of Continental?s executive board and head, the acquisition is a part of the company?s overall strategy to focus on both the commercial as well as passenger vehicle segment. ?India?s truck tyre market is of outstanding relevance worldwide and exceeds with a size of 18 million tyres per year ? he said.