Home / Companies / Yokohama Rubber to acquire KKR-owned Alliance Tire Group

Mumbai: The Yokohama Rubber Co. Ltd has agreed to buy Alliance Tire Group, a Netherlands-based company led by Indian entrepreneur Yogesh Mahansaria, for $1.2 billion from private equity firm KKR & Co. Ltd. Yokohama Rubber, a Japanese maker of passenger-car tyres, will purchase all shares from KKR and other parties and expects to complete the acquisition by 1 July, according to a statement released on Friday.

The deal is valued at about 2.2 times Alliance Tire’s annual sales and more than 12 times its operating profit for the 2015 fiscal year.

Alliance Tire makes tyres for agricultural, industrial, construction, forestry machinery which it sells in 120 countries around the world, with a focus on the North American and European markets.

Yokohama Rubber does not currently manufacture or sell tyres for agricultural or forestry machinery. The acquisition of Alliance Tire will strengthen Yokohama Rubber’s product line-up in commercial tyres, according to the statement.

In 2013, KKR acquired a controlling stake in Alliance Tire Group from Warburg Pincus Llc for an undisclosed sum. According to a Mint report in March 2013, KKR acquired as much as 80% of the tyre maker in a deal that would have valued Alliance Tire at about $600 million (around Rs3,264 crore).

Alliance Tire was acquired by the Mahansarias with the backing of Warburg in 2007 for $150 million. The company is headed by chairman Ashok Mahansaria and his son Yogesh is group chief executive.

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