MUMBAI: Apollo Tyres is in talks with Chinese rival Shandong Linglong Tire for ChemChina to use $9 100 million to buy South Korea’s second-largest tire maker Kumho Tire, some sources told The Economic Times.

If the Indian company succeeds, the deal would create a tire maker that would join the ranks of global tire makers. The top seven companies have a strong presence in the US and Europe.

These three companies are among the four finalists. The fourth company is reportedly French heavyweight Michelin, although the Economic Times could not independently confirm this.

Two years ago, Apollo bought US-based Cooper Tire for $2.51 billion, but it ended in failure.

The consortium of creditors that took over seven years ago is in the final stages of beginning the process of selling its 42% holding. Credit Suisse is targeting creditors such as Woori Bank (14.2 stake), Korea Development Bank (13.5) and KB National Bank (4.2) for the auction.

Apollo is in talks with several companies and global banks are providing bridging finance, sources close to the matter said. Meanwhile, the Golden Lake board extended the final bidding deadline from Friday to Monday, the sources said.

Earlier, Germany’s Continental, U.S. Goodyear Tire and Japan’s Yokohama Tire were also reported to be interested in Kumho tires. Resignation.

An Apollo spokesman declined to comment. Kumho, Michelin, ChemChina and Shandong Linglong did not respond to inquiries.

Kumho’s major creditors announced plans last week to sell shares through an exchange of notices.

Chinese companies are formidable competitors. /p “Chinese companies are very aggressive. Who would have thought that the Chinese chemical association would outbid globally recognized brands such as Dual Endurance for $7.7 billion in 2015?” One investment banker said. Aggressive bidding here. ‘

Park Sam-koo, chairman of Kumho Asiana Group, has the right of first refusal, but must offer the highest price. He is unlikely to find the funds to do so, according to South Korean media reports.

Eager shopping

Kumho has decided to cede its lead in the Asian tire market to Apollo, which appears to have given up on the Cooper acquisition after it failed. Since 1975: Since entering the U.S. market in 2000, Kumho has consolidated its position in the local replacement equipment (RE) market.

Kumho had fiscal 2015 sales of $2.3 billion and a net profit of $100 million. It had $50 million. Notable employees operate three factories in South Korea and export to Europe and the US. The company is the 12th largest tire manufacturer in the world.

As of Friday’s closing price, Kumho’s 42 percent stake was up 1.99 percent to about 63 billion won. But that price will come with a huge control premium. (Kumho had a market capitalization of $579.3 million as of Friday’s closing price.)

Apollo It is the leading marketer of automotive tires in China and has recently expanded its global presence with operations in South Africa and Europe.

Analysts say Apollo can grow inorganically despite the failed Cooper deal.

Founded in 1972, Apollo is the world’s 17th largest tire manufacturer with annual consolidated revenues of Rs 1171 crore. Until March. We have four plants in India and one in the Netherlands.

JM Financial analysts Shyam Sundar Sriram and Vivek Kumar “Several of India’s auto component makers have added to their revenues through acquisitions, but most of them are struggling to improve profitability.” Few companies have been able to increase revenues through acquisitions while increasing profits, the study said.

The tire industry is experiencing consolidation due to weak macroeconomic conditions and price wars. In early March, Japan’s Yokohama acquired KKR Holdings Alliance Tires for $1.2 billion. last year, JK Tire acquired Kesoram Industries Haridwar Tire Plant. Trelleborg is a leader in engineered polymer solutions and a major player in the specialty tire segment. Last November 11 Monthly acquisition of CGS Holding in Czech Republic. in addition, Apollo Tyres is still looking for global acquisitions.