Michelin to buy Indonesian tiremaker
Michelin is acquiring tiremaker Multistrada Arah Sarana to boost production in Indonesia. Founded in 1988, Multistrada had an annual production capacity of more than 180,000 tons in 2017 and generated sales of $281 million.
Michelin will pay $439 million for 80 percent of the Multistrada shares, subject to certain closing adjustments. Michelin will then launch a public offer for the remaining outstanding shares.
Michelin expects to reap synergies of $70 million annually within three years of completing the purchase, in production, sales, and purchasing. To strengthen sales operations, the French company will also obtain a 20 percent stake in Indonesian tire retailer Penta Artha Impressi.
Michelin CEO Jean-Dominique Senard said in a statement Tuesday: “The acquisition of Multistrada represents an excellent opportunity for Michelin to expand its operations in Indonesia, the most populous country in Southeast Asia, and immediately gain competitive, good-quality production capacity without having to create any new manufacturing facilities.” Pieter Tanuri, Chief Executive Officer of Multistrada, said: “We are very proud of what we achieved with Multistrada and we are confident Michelin is the ideal partner to take Multistrada forward into a new era of growth and success for the benefit of all stakeholders and employees.”
Read the full press release here.