JK Group to acquire Kesoram’s Haridwar tire unit

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JK Tyre and JK Asia Pacific Singapore have signed a binding agreement with Kesoram Industries to acquire 100% equity in Cavendish Industries Limited (CIL) including its production plant in Haridwar, India, which manufactures a range of tires, tubes and flaps.

JK Group has agreed on the acquisition at an enterprise value not exceeding Rs2,200 crores, subject to conditions, wherein JK Tyre will hold the largest shareholding block and shall have substantial management control of CIL with an option to place up to 55% with its associates and group companies.

It is proposed the acquisition is funded by a combination of debt and internal accruals raised by JK Tyre and other JK Group entities with JK Tyre’s financial exposure expected to be in the region of Rs450 crores. The final transaction is expected to be completed over the next few months (subject to various approvals) with final documentation expected between the parties in due course.

It is hoped the acquisition will enable JK Tyre to further expand in the truck and bus radial segment as well as enter into the fast growing two and three wheeler markets.

Dr Raghupati Singhania, chairman of JK Tyre (pictured), said, “The transaction is a reflection of the inherent strength of the company in undertaking acquisitions with turnaround potential and successfully delivering results to all the stakeholders in the business. This was recently evidenced by a similar success story in JK Tyre’s acquisition of Tornel, Mexico.”

16 September, 2015

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Rachel's career in journalism began around five years ago when she started working for UKi Media & Events, having recently graduated from Coventry University where she studied the subject. Her favourite aspect of the job is interviewing industry experts, including researchers, scientists, engineers and technicians, and learning more about the ground-breaking technologies and innovations that are shaping the future of the automotive and tire industries.

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