AMSTERDAM (May 18, 2009) — India's Apollo Tyres Ltd. has acquired Dutch tire maker Vredestein Banden B.V. from the bankrupt Dutch-Russian holding Amtel-Vredestein N.V. for an undisclosed sum.
The deal, initiated in November 2008 and approved late last week by a Dutch bankruptcy court judge, will add about $450 million to Apollo's annual sales and give the Gujarat, India-based tire maker a key entrÃ&Copy;e to the European marketplace, where it up until now has distributed through indendent distributors.
“This is a strategic alliance for us and will bolster Apollo's plans for its European customers,” said Apollo Chairman and Managing Director Onkar Kanwar. “The fit between the two companies spans the entire spectrum of R&D, products and people to manufacturing and markets. It is a synergistic match and our aim is to increase Vredestein's global value in the coming years.”
Vredestein's sole plant in Enschede, Netherlands, has annual capacity for 5.5 million tires, roughly 70 percent of which are high-performance car tires. The majority of Vredestein's business is in Europe with the Vredestein and Maloya brands. It is represented in the U.S. by Vredestein Tyres North America Inc. in Metuchen, N.J.
“This alliance is a win-win combination for both companies,” said Vredestein Banden CEO Rob Oudshoorn, who added the partnership with Apollo will bring a “desired level of stability” to Vredestein and its employees. “We will bring to Apollo our edge in passenger car tire technology alongside an understanding of the European market.
At the same time, Mr. Oudshoorn said, “Apollo can offer us access to the non-European markets, valuable manufacturing expertise and assistance with bringing down costs by leveraging the purchasing power of a larger entity.”
Vredestein employs approximately 1,500 and has averaged an earnings/sales ratio of 8.5 percent over the past five years, Apollo said.
Vredestein Banden was bought by Amtel Vredestein in April 2005. It was able to keep itself afloat through Amtel-Vredestein's bankrutpcy by obtaining separate financing.
This is Apollo's second major acquisition in the past four years. In 2006 Apollo bought Dunlop South Africa and has since integrated its operations fully. Apollo reported fiscal 2009 sales of $1.07 billion.
“I have closely watched Apollo's acquisition and integration with Dunlop South Africa,” Mr. Oudshoorn said, “and the way they went about the merger speaks highly of the Apollo management's outlook on people and implementing best practices.”
Neeraj R. S. Kanwar, vice chairman and joint managing director of Apollo, said a comprehensive integration process will begin within the next month with particular focus on research and technology, products and brands, corporate purchase and finance.
“We will continue to run Vredestein Banden under the leadership of the current Vredestein management,” he said. “As is our norm, the idea going forward is to ensure we leverage on each other's strengths for combined benefits and better products and services for our customers.”