The agreement is subject to regulatory approvals, including that of the South African Competition Commission, and certain conditions precedent to the closing of the transaction.

The acquisition is Apollo’s first foray into the global overseas manufacturing arena and is expected to result in the combined entity ranking 14th globally in terms of size. Furthermore, the acquisition is expected to springboard the combined entity into position as a significant global player and is likely to form the base for future growth initiatives.

For Dunlop, the acquisition further enhances its already considerable technology. Its current radial technology will be boosted by Apollo’s in-house technology coupled with support from European and North American arrangements.

“We see tremendous synergy in the operations of the two companies who can leverage each others’ strengths to be a global force,” said Onkar S. Kanwar, Chairman and Managing Director of Apollo Tyres Ltd, whose family is also the majority shareholder of Apollo. Group Michelin of France is a 14.9% shareholder of the company.

“For Dunlop, one of the crucial aspects of the acquisition is that the new owners are well established global tyre manufacturers, with an extremely competitive culture. This will fit the Dunlop culture perfectly, as will the enhanced technology options,” said Mike Hankinson, CEO of Dunlop.

“The structure of Dunlop, its operating subsidiaries, management and loyal and committed staff will remain intact. Our ongoing relationship with our dealer base worldwide has also been significantly enhanced,” said Pierre Dreyer, Managing Director of Dunlop. “Apollo will certainly add a new dimension to our suite of options to our dealers,” he added.

“Both parties will benefit from the combined purchasing power of the group. As India becomes a global powerhouse, the new entity will enhance the African manufacturing plants in Durban, Ladysmith and Bulawayo,” said Hankinson.

Low cost manufacturing capabilities and techniques from India will assist Dunlop in cost containment into the future and will assist in competing with the sharp increase in imported cost competitive products into South Africa.

The purchase by Apollo excludes the Dunlop interests in Dunlop Nigeria and Dunlop Zambia as well as Dunlop International Limited, the brand company. Apollo will hold usage of the Dunlop brand rights in South Africa and Dunlop’s African territories.

Following inaccurate comments in the Zimbabwe press, Mike Hankinson confirmed that the investments in Zimbabwe would remain part of the Dunlop Group.