Apollo re-enters race to acquire South Korea’s Kumho Tire and Industries

October 2, 2017

Apollo_tiresApollo is again vying for the acquisition of South Korea’s Kumho Tire and Industries after its sale to a Chinese bidder collapsed over tension in the Korean peninsula impacting deal valuations, said several people aware of the matter.

Chinese tyre giant Qingdao Doublestar signed a definitive agreement with Kumho’s creditors to acquire a 42 per cent stake in January but the deal was called off primarily due to the South Korean government’s opposition.

Beijing’s support to Pyongyang made authorities uncomfortable, compounded by the fact that Kumho’s tyres have military and defence applications, said people cited above. “The previous deal was for $830 million and Apollo’s previous bid was at around $775 million.  However, with the Chinese out of contention, the latest deal could be in the range of $750-800 million,” said one of the persons.

If successful in its second attempt, Apollo could break into the global top seven with a strong presence in the US and Europe. Apollo and Kumho didn’t respond to emails.

The deal with Doublestar is believed to have collapsed for two reasons. The Chinese firm wanted a 16 per cent cut in the acquisition price because of deteriorating earnings.

But more importantly, South Korean officials objected to the transaction because of the strategic nature of Kumho’s business.

“It supplies tyres for fighter planes and military vehicles, and tensions with China, which is a traditional North Korean ally, worked as a catalyst for the collapse of the transaction,” said the person cited above.

Share and Enjoy:
  • Print
  • Digg
  • del.icio.us
  • Facebook
  • Google Bookmarks
  • email
  • PDF
  • RSS
  • Twitter

Tags: ,

Join Our Mailing List

Enter your email address:

Delivered by FeedBurner

International Rubber Prices
(as of 16, October 2017)

Monthly The prices shown above do not include VAT @4% on purchase and expenses towards packing, transportation, warehousing  and other incidentals


Source: India Rubber Board

Automotive

PRA ELECTRONIC ISSUE 2017
October 2017 Issue

Click here & browse