Germany's Continental acquires Modi Tyres for Rs134 crore
16 July 2011
Modi Rubber Limited has sold its tyre making unit Modi Tyres to Continental AG, the world's fourth-largest tyre manufacturer, for Rs134 crore.
The deal was first announced by the two companies in April, (See: Continental to acquire Modi Tyres for undisclosed sum)
Under the deal announced yesterday, Hanover, Germany-based Continental acquired all the shares of Modi Tyres for Rs 117.61 crore and paid an additional Rs17.22 crore as non-compete fee.
Modi Tyres will now become a wholly-owned subsidiary of Continental Group, the Ghaziabad-based company said in a regulatory filing.
The German tyre major, which has had a relationship with the beleaguered Indian rubber major since 1974, had agreed in April 2011 to buy Modi Tyres.
Continental is expected to focus on the domestic market, and will manufacture non-radial or bias tyres and radial tyres for trucks and buses and also radial tyres for cars. The Germany company, which reported sales of $37.5 billion in 2010, has a presence in 46 countries.