The world's fourth largest tyre manufacturer Continental has taken over full control of India's Modi Tyres Company in an all-share deal valued at 18.6 million euros.
The acquisition of the subsidiary of Modi Rubber Ltd is intended to build up Continentals presence in the subcontinent by expanding local production and distribution of tyres for trucks, buses and passenger cars, the Hannover-based company said today in a press statement.
An agreement on Continentals take-over of 100 per cent stake in Modi Tyres was signed by the two companies on April 18 and the acquisition process has just been completed, the statement said.
The two sides agreed not to disclose further details on the deal. The new fully-owned subsidiary called Continental Tyres India Ltd will be located in Delhi. Continental's management board member and head of truck tyres division Nikolai Setzer said the acquisition is part of the company's strategy to invest in local production of tyres for trucks and passenger cars in the rapidly growing markets in Asia.
Continental's expansion in India has great significance for its commercial vehicles tyres business in the region, he said.
India's market for truck tyres is extremely important world wide and it already overtakes the annual sales volume 18 million tyres in western and central European markets, according to Setzer.
There has been remarkable growth also in India's sales of tyres for passenger cars and vans as well as replacement components and equipment, where Continental has a leading position and many years experience, he said.
He expressed optimism that Continentals premium technology in combination with its new local presence will make it a strategic partner for automotive manufacturers and tyre replacement business in India.
An integration team of the company is working with its staff in India to revamp its production at its two manufacturing locations in Modipuram and Partapur and to give an optimum start to its new business in India making use all available resources of the company.
Continental will announce more details of its engagement in India at a news conference in New Delhi on August 24, the statement said.