Alliance Tire Group acquisition gets CCI approval
India:
Following the company’s announcement in March, Yokohama has entered into a
transaction of USD1,179 million as the equity value of the acquisition.
Kohlberg Kravis Roberts (KKR), a multinational private equity firm, is the
major stakeholder in ATG, while the remaining is held by International Finance
Corporation along with other entities.
Alliance Tire Group ventures
into the development, manufacturing and sale of off-highway-tires used in
agriculture, forestry, and industrial vehicles. Also, the company spreads over 120
countries, including India. Yokohama Rubber Co. has already set up a
wholly-owned subsidiary, Yokohama India Pvt Ltd (YIPL), which manufactures tires
for trucks, buses and off-highway vehicles, along with other related products.
Competition Commission of
India (CCI) has given its approval to the proposed acquisition of ATG by
Yokohama. In order to purchase all the shares of Alliance Tire Group, Yokohama
has entered into an agreement with Kohlberg Kravis Roberts (KKR) along with
other concerned parties.
According to a recent report published by TechSci Research, “India Tire Market Forecast and Opportunities, 2021’’ Favourable inflationary
scenario, expanding middle class population and increasing national disposable
income, tire sales across all the automobile segments is expected to grow in
the country. Also, presence of major automobile OEMs along with growing
automobile sales would boost the demand for tires in the country.
TechSci Research is of the
view that this strategic move by Yokohama would strengthen its hold in Indian
as well as other tire markets across the globe. Moreover, Yokohama would
benefit from the established reputation of Alliance Tires in the off-highway
tires segment, thereby making it a profitable strategic move.