Amtel-Vredestein to Acquires Russian Tyre and Auto Part Distributors

Amtel-Vredestein’s (AV) AV-TO retail subsidiary has announced that it is to Nizhny Novgorod-based motorfactor, Pigma, and tyre distributor Megashina. With over 10 years in the market, LLC Trade House Pigma (Pigma), is reportedly a dynamic company that sells more than 27,000 auto components from approximately 40 producers to over 1500 customers throughout Russia and CIS. Pigma also built a network of seven tyre service retail centres in Nizhny Novgorod – which it sold to Amtel-Vredestein in March 2006.

In closing the acquisition, Pigma will purchase Trade House Megashina (Megashina), a leading Russian tyre wholesaler and distributor. Megashina serves over 500 customers specializing in tyre sales, including tyre retailers, auto salons (auto dealers) and auto service stations. It operates 14 offices and warehouses nationwide.

By entering the auto parts distribution business, AV says it adds a high margin, complimentary product to its distribution channels and further offsets the seasonality of its tyre production and retail operations. “By combining these complimentary businesses and experienced, hands-on executives into one group we have constructed a more robust, more dynamic, more self-sufficient company capable to develop both its wholesale and retail operations,” said Amtel-Vredestein CEO, Alexei Gurin.

Pigma’s top directors, Mikhail Pigaev and Nikolai Makarov will remain with the company in senior positions. “By joining forces with an industry leader, we will be able to accelerate our plans to expand and enhance our business. And we, in turn, can use our experience to assist Amtel-Vredestein in the further development of its distribution and retail network,” said Pigaev.

The merger of AV-TO and Pigma/Megashina is expected to produce a company with sales of approximately $250 million, according to an official statement.