JK Tyre denies Birla acquisition report

Indian manufacturer JK Tyre denies it is negotiating the acquisition of Birla Tyres with current owner Kesoram Industries. Responding to an article published by Indian financial daily The Economic Times earlier today, the tyre maker told BSE Ltd (the Bombay Stock Exchange) that “there is no transaction between JK Tyre & Industries Ltd. and Kesoram Industries Ltd.”

In a text titled ‘JK Tyre Frontrunner to Buy Birla Tyres from Kesoram’, The Economic Times shared information from “two persons familiar with the matter.” One of the pair opined that discussions between the two parties are “at an advanced stage” and the “broad contours of the deal have been finalised.” The publication reports that the deal is worth more than Rs 20 billion (£202.6 million), however it also notes that Kesoram industries refutes that Birla Tyres is even up for sale. According to The Economic Times, Kesoram company secretary Gautam Ganguli told the daily in a text message that the company “has no intention” of divesting its tyre division.

This isn’t the first time The Economic Times has reported negotiations regarding the sale of Kesoram Industries’ tyre assets. In January, the publication shared that MRF Tyres was in advanced discussions with Kesoram over the purchase of its tyre making facility in Laksar, Uttrakhand state. Ganguli dismissed this news as being “based entirely on speculation and conjecture.” Drawing on information from unnamed, multiple sources, The Economic Times wrote that MRF Tyres sought to acquire Kesoram Industries’ main tyre unit for “a value that’s far higher than the market capitalisation of the entire diversified Birla conglomerate.” The Laksar plant did indeed change hands, however the new owner was not MRF; on 1 April 2015, the facility was transferred to Kesoram subsidiary Cavendish Industries Ltd. for Rs 28 billion (£283.6 million).