JK Tyre acquires Mexican firm Tornel for Rs.2.7 bn

June 23rd, 2008 - 8:38 pm ICT by IANS  


New Delhi, June 23 (IANS) JK Tyre and Industries Ltd has acquired 100 percent shares of Mexican tyre company Tornel along with its subsidiaries for Rs.2.7 billion ($63 million), the company announced Monday. The acquisition has been made through special purpose vehicle (SPV) route, which has been financed through a combination of equity and debt. The company’s board had approved the acquisition in its April 11, 2008 meeting.

“JK Tyre and Industries Ltd will substantially increase its global foot print with this acquisition,” the company said in a statement.

“Strategic location of Mexico offers Tornel free access to the NAFTA (North American Free Trade Agreement) trade block and emerging economies of central and southern America. Therefore, the acquisition has strengthened JK Tyre’s market positioning in these territories considerably,” the statement said.

Post Acquisition, collective capacity of JK Tyre has risen to 940 tonnes per day with Tornel’s production capacity of 290 tonnes and JK Tyre’s capacity of 650 tonnes at its four plants in India. This makes JK Tyre India’s largest four-wheeler tyre company.

JK Tyre’s vice-chairman and managing director R.P. Singhania said: “This acquisition has further strengthened our leadership in India. JK Tyre already exports tyres to 75 countries across six continents. Our export turnover last year was Rs.5 billion.”

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