Analysts See Oliver Acquisition as Positive Move for Michelin

Financial analysts are predicting Michelin will continue to grow its retread business following the purchase of Cooper Tire & Rubber subsidiary, Oliver Rubber Company. “This would mean that Michelin is growing in the tyre retread business,” Deutsche Bank analysts wrote, adding: “The group has currently approximately 700 million euros of revenues in retread. This is potentially a very interesting market which should grow (penetration rate of only 37 per cent in Europe versus 85 per cent in North America, and should be highly profitable [with] significantly less capital expenditure and raw material costs. We believe that this strategic move will give vertically integrated tyre Co a significant competitive advantage.