MUMBAI, India (April 18, 2011)—Continental A.G. is pursuing the acquisition of India's Modi Tyres Co. Pvt. Ltd.—a Conti technical licensee for the past 37 years—as part of its “strategy to invest in growing markets in Asia for its core businesses.”
Modi Tyres parent Modi Rubber Ltd. has agreed to sell all of its equity in Modi Tyres to Conti for an as-yet undisclosed price, according to statements from Modi and Continental.
The deal “still depends on fulfillment of several conditions contained in the agreements,” the companies said.
After completion of the transaction, Modi Tyres will become a wholly owned Continental subsidiary, Hannover, Germany-based Conti said, and will focus on local production and distribution of bias and radial truck/bus tires as well as radial passenger car tires for the Indian market.
“This development underlines Continental's commitment to the Indian marketÃ ,” Conti said in a prepared statement.
Modi Tyres operates a tire factory complex in Modipuram, Uttar Pradesh, near New Delhi in northern India, with capacity for passenger, light and medium truck, farm and two-wheeler tires. Employment stands at about 2,300.
Modi already produces up to 1 million Conti-branded bias-ply truck and bus tires a year for Conti under a license agreement signed in 2009. At that time, Conti said bias-ply tires accounted for more than 90 percent of the Indian market.
Conti's relationship with Modi Rubber dates to 1974 when the two agreed to an extensive technical cooperation for setting up the plant in Modipuram.
Modi Rubber's annual sales are estimated at about $75 million, according to various financial services' reporting on the company.