Lianhua Supermarket, a subsidiary of the Bailian Group, has announced that it will acquire a 100% stake in Hualian Supermarket from Bailian Group for CNY492 million.
With the implementation of the acquisition, Hualian experiences major executive changes. According to a report published by the company, Hua Guoping, the former general manager for Bailian’s supermarket business department, has been appointed general manager for the new Lianhua Supermarket, and Liang Wei, the former general manager of Lianhua Supermarket, has been appointed executive deputy general manager.
On the completion of the acquisition, Hualian Supermarket will become a subsidiary of Lianhua Supermarket and the number of Lianhua Supermarket outlets will be increased to 5,268, including 3,184 standard supermarkets.
According to Ma Xinsheng, the chairman of Bailian Group and Lianhua Supermarket, after buying Hualian Supermarket the group will consolidate store business through resource integration and will accelerate expansion to the second and third-tier markets in the Yangtze River Delta with the dual-brand market strategy.
INDIA’S largest tyre maker Apollo Tyres has acquired Dutch tyre maker Vredestein Banden for an undisclosed sum, gaining a foothold in the lucrative European tyre market and raising its annual turnover by a quarter. Vredestein Banden, with an estimated annual revenues of 300 million euro ($403 million), was a subsidiary of Russia’s largest tyre manufacturer Amtel-Vredestein, which went bankrupt last month.
“This strategic acquisition will bolster Apollo’s plans for its European customers. We have acquired one of the most profitable tyre makers in Europe, and will get direct access to Vredestein’s large market in Europe,” said Delhi-based Apollo Tyres’ chairman and managing director Onkar S Kanwar on Monday.
The Dutch firm, which is likely to be renamed Apollo Vredestein, will be integrated with BSE-listed Apollo in the next few months. The process will be undertaken jointly by both the companies to develop synergies in the field of marketing, technology, manufacturing and human resources. Apollo Tyres’ share price jumped 9.43% to Rs 29 on BSE on Monday from Friday’s closing price of Rs 26.50.
Vredestein has a compounded annual revenue growth rate of 8.5% for the past five years, and has capacity to produce 5.5 million tyres annually, which takes Apollo’s total tyre capacity to 16.8 million.
The acquisition will push Apollo Tyres’ annual turnover to Rs 7,200 crore. The company targets Rs 10,000 crore revenues by fiscal 2010. Apollo Tyres raised funds for acquisition through a combination of internal accruals and debt. The company was advised by KPMG, Nomura and CMS Derks Star Busmann on the transaction.
Mr Kanwar said Apollo has deferred its plan to set up a greenfield plant in Hungary with a proposed investment of 200 million euros to produce 70 lakh tyres a year. This is due to land acquisition problems in the East European country. Instead, it will now concentrate on consolidating operations in Holland. Vredestein is Apollo’s second international acquisition.