Pawan K. Ruia in Calcutta on Thursday. Picture by Kishor Roy Chowdhury

Calcutta, Aug. 5: City-based Ruia Group today announced the acquisition of Germany’s solid tyre company Gumasol — its third such overseas buyout in about two years.

Ruia Group, which owns tyre makers Falcon and Dunlop and infrastructure entity Jessop, bought the German firm from an insolvency administrator for an undisclosed amount.

“I see a big opportunity in India for solid tyres, especially in infrastructure, heavy industry and defence. The company has the technology which I was looking for in the last two years,” group chairman Pawan K. Ruia said.

Located in south Frankfurt, Gumasol was a family-owned company before it became insolvent in the wake of the global economic slowdown last year. It earned a turnover of 24 million euros (Rs 145 crore) last fiscal.

This is the second German acquisition by the Ruias after they bought auto sealing system company Draftex last year.

The Gumasol deal was financed by internal accruals and credit.

Martin Wiedmann, the administrator who oversaw the transaction, said the group’s ability to take key decisions quickly helped it to clinch the deal.

“It (Ruia Group) was also receptive about labour issues which can make or break many restructuring process in Germany,” he added. Gumasol has 106 full-time employees.

Besides producing from its German site, Gumasol outsources some products to Continental AG in Sri Lanka.

Ruia said he could use the facilities of Falcon and Dunlop for the outsourcing if they could produce more cheaply.

SsangYong bid status

Ruia said he would decide on bidding for Korean auto maker SsangYong in the next three days; the deadline for submitting the bids is August 10.

The Ruias along with Renault-Nissan and Mahindra & Mahindra are among the six shortlisted bidders for SsangYong.

Ruia said the market capitalisation of SsangYong was $400 million.

“Among other factors we are looking at for a final decision are future cash flow, profitability and the company’s ability to withstand future competition,” Ruia said.

adding he had visited the SsangYong plant earlier.

The Ssangyong administrator will offer 51 per cent stake to the acquirer and the entire proceed will be utilised for the company's operations.

“Companies like this does not come for sale often. But at the same time, we are exploring may acquisitions and if Ssanyong does not work out, world will not come to an end,” he said.

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