Dunlop SA Sold to Apollo Tyres, Global Parent in R400M Deal
Low-cost techniques from India to cut costs Dunlop Tyres International and lndian-listed company
Apollo Tyres yesterday reached agreement to wholly acquire local Dunlop tyre maker for 2,85bn rupees or about R400m. Dunlop’s shareholding includes a consortium led by management and Ethos Private Equity; which four years facilitated a growth strategy.
Since 2000, Dunlop has pumped more than R500m into its Durban off-road and truck operation and its passenger factory in Ladysmith. The investment - has brought the group to the point where it is one of the leading tyre makers and distributors in the country. Turnover touches R1,2bn and the deal remains subject to regulatory approval.
Dunlop has factories and distribution networks in SA, Zimbabwe, the UK and Nigeria, while Dunlop Tyre International has the use of the Dunlop trademark in 33 countries. The company has global ownership of 1 500 trademarks for the Dunlop name in more than 100 territories worldwide. Excluding the US, Canada and Australia, the worldwide licence includes Dunlop Argentina, Goodyear Dunlop Europe, Dunlop Aerospace, Dunlop Oil and Marine, Dunlop Aircraft Tyres, Dunlop Fenner and international sports goods maker Dunlop Slazenger.
The acquisition will not affect the Dunlop structure, operating subsidiaries, management or staff. The move is Apollo’s first foray into the global manufacturing arena and it is expected to raise the combined entity, ranking 14th internationally, in terms of its size and create a base for further growth. The purchase excludes the Dunlop interests in Dunlop Nigeria and Dunlop Zambia, as well as the brand company Dunlop international.
Apollo will have the use of the Dunlop brand rights in SA and the African territories. Dunlop CEO Mike Hankinson said yesterday that the mover further enhanced the group’s technology. Current radial technology will be boosted by Apollo’s in-house technology coupled with support from its European and North American arrangements. Apollo Tyres chairman and MD Onkar Kanwar said there was synergies in the two operations that could create leverage strengths, enabling the groups to become a major global power.
The Kanwar family is the majority shareholder, with Group Michelin of France holding a 14,9% stake. Ethos partner, Eugene Stals said leadership and innovative funding has facilitated Dunlop’s initial restructuring and subsequent growth.
Lost-cost manufacturing capabilities and techniques from India would assist Dunlop in cost containment and in combating the sharp increase in imported cost competitive products into SA. Hankinson also confirmed that that the company’s investment in Zimbabwe would remain part of the group, following earlier reports that the entity would be sold.