Yokohama to buy Alliance Tire Group for Rs. 8,000 crore

Yokohama Rubber Co. is set to acquire Alliance Tire Group (ATG) for a sum of US $1.2 billion (approximately Rs. 8,000 crore). With this deal, the Japanese company plans to expand its commercial tyres business. At present, it does not manufacture or sell tyres for agricultural or forestry machinery.

ATG was founded in 2006 by Ashok Mahansaria and his son Yogesh, with financial backing from Warburg Pincus - a private equity firm. It is the world's fifth-largest manufacturer of off-highway tyres. Its products are used in the agricultural, forestry and construction sectors.

The company has three manufacturing facilities - two in India (Tirunelveli, Tamil Nadu and Dahej, Gujarat) and one in Israel (Hadera). In 2015, it recorded global sales of US $529 million (Rs. 3,527 crore) and posted a net profit of US $95 million (Rs. 634 crore).

KKR, another private equity firm, acquired Warburg's stake in the company in 2013 for US $500 million (Rs. 3,334 crore). At present, KKR holds 90% stake in ATG, while the Mahansarias hold 10%. Yokohama will buy out the stakes of both parties.

Source: Economic Times