JK Tyre & Industries Limited’s share price dropped by 1.30 per cent to ₹436.60 as of 10.41 am today, a decline of ₹5.75, a day after the company announced its plans to merge with Cavendish Industries Limited.
The merger, approved by JK Tyre’s board on September 16, 2024, will consolidate both companies’ automotive tyre manufacturing and distribution under one listed entity.
The merger will be carried out through a share swap arrangement, with JK Tyre offering 92 equity shares for every 100 shares of Cavendish Industries.
According to the company, the merger is expected to bring operational synergies, cost efficiencies, and improved market positioning. The deal is still subject to regulatory approvals, including from stock exchanges and the National Company Law Tribunal.
As of June 30, 2024, JK Tyre reported standalone total assets of ₹9,642.01 crore and a net worth of ₹3,811.96 crore, while Cavendish Industries reported total assets of ₹4,003.67 crore and a net worth of ₹1,009.71 crore.
The merger may slightly alter JK Tyre’s shareholding pattern, with promoter holding likely to decrease from 50.55 per cent to 49.31 per cent after the transaction.
