Apollo Tyres completes acquisition of Vredestein Banden
With all regulatory approvals in place and consent from the Judge of the Dutch Courts, India-headquartered Apollo Tyres Ltd. has concluded the formal process of acquiring a 100 % stake in the European tyre manufacturer Vredestein Banden BV (VBBV), based out of the Netherlands. The acquisition process began in November 2008 when a global bidding process was initiated by the parent company, Russia’s largest tyre manufacturer Amtel-Vredestein NV (AVNV). AVNV was declared bankrupt on 29 April 2009.
An independent tyre company since 1946, VBBV became a part of Russia’s largest tyre manufacturer AVNV in April 2005. AVNV’s bankruptcy has not affected the Netherlands-based VBBV, which had a turnover of approximately EUR 307 million for calendar year 2008. VBBV’s manufacturing unit is located in Enschede, the Netherlands. The company currently employs around 1,500 people and has constantly achieved a CAGR of 8.5 % in revenue over the last five years. Over 70 % of the 5.5 million tyres manufactured every year are high performance, high speed passenger car tyres with speed ratings up to 300 km/h and sold primarily in the European Union. In addition to its performance tyres, the company manufactures a second brand called Maloya.
The acquisition strengthens Apollo Tyres’ ongoing plans for the European market and provides Vredestein with opportunities to leverage its proximity to larger industry players in terms of costs, people, products and access to markets beyond the European Union. Vredestein has a network of sales subsidiaries spanning key countries in the EU and the USA. Over 30 % of VBBV’s products are sold in Germany, with the rest being sold across the EU and other parts of the world, including the US and the Middle East.
Apollo Tyres will continue to run VBBV under the leadership of the current Vredestein management. According to the company, a comprehensive integration process will begin within the next month. Areas of particular focus will be research and technology, products and brands, corporate purchase and finance. At the end of the process, which will involve managers from both companies, a consolidated plan for the short and medium term will be put into action.
“This is a strategic alliance for us and will bolster Apollo’s plans for its European customers”, comments Onkar S. Kanwar, Chairman & Managing Director, Apollo Tyres Ltd. “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.”
“This alliance is a win-win combination for both companies,” adds Vredestein Banden BV’s Chief Executive Officer, Rob Oudshoorn. “We will bring to Apollo our edge in passenger car tyre technology alongside an understanding of the European market. At the same time, 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. I have closely watched Apollo’s acquisition and integration with Dunlop South Africa, and the way they went about the merger speaks highly of the Apollo management’s outlook on people and implementing best practices.”