Manbat has opted not to go through with the acquisition of Energy Batteries Ltd after a period of due diligence. On 1 October 2008 Manbat Ltd entered into an agreement with Energy Batteries Ltd to look into the possibility of Manbat Ltd acquiring Energy Batteries Ltd. However, according to an official statement, “it has become apparent to the directors of Manbat Ltd that it would not be in the interests of Manbat Ltd to continue with the acquisition.”
In light of slowing world markets, as highlighted by the company’s latest quarterly financial figures, Continental is cutting back production at a number of its facilities. Amongst the measures to be introduced to this effect are a shortening of the working week, a prolonged end of year shutdown period, and a reduction in the number of temporary employees on the company’s payroll.
“Continental is well prepared for the difficult challenges ahead,” said Executive Board chairman Dr. Karl-Thomas Neumann. “Nonetheless, we have initiated additional programmes to cut costs. For instance, in the Automotive Group we will reduce the number of temporary workers, greatly lengthen the plant holiday shutdown period at the end of the year by using the existing work time accounts, and, depending on the location and the order situation, deviate downwards from the five-day-week until further notice. Furthermore, we are putting investments that are not urgent on hold,”
On 22 October SmarTire Systems Inc. announced it was in the opening stages of selling its business and related assets to Bendix Commercial Vehicle Systems LLC, the North American affiliate of the Munich, Germany-based Knorr-Bremse AG. According to a company statement the companies have signed a “term sheet,” selling the business for an undisclosed amount. The acquisition by Bendix CVS is subject to corporate approvals.
Micheldever, the UK’s largest independent tyre wholesaler, distributor and retailer, has jumped 49 places to 154th position in the annual Sunday Times HSBC Top Track 250 league table of the best performing mid-market private companies, after achieving annual sales total of more than £224 million in the last financial year, an increase of almost 33 per cent on the previous year’s performance. According to Micheldever, it is only tyre firm to appear in this year’s list.
Bridgestone has lifted its revenue and profit targets for 2012, stating simultaneously that it hopes to continue the upward trend the year after too. The Japanese giant revises its five-year plans at least once per annum. Last year it forecast 400 billion yen (2.3 billion pounds sterling) operating profits, alongside revenue of 4 trillion yen (23 billion pounds sterling), but now the stakes have been raised to 410 billion and 4.3 trillion yen (2.4 billion and 23.7 billion pounds sterling) respectively. (Assuming 1 pound sterling = 173 yen.)
Bridgestone’s new predictions came on the same day that the world’s largest tyre-maker’s stock made significant gains on the TSE. The company rose by up to 9.5 per cent (163 yen), closing on 20 October at 1,874 yen. According to Bloomberg, the three-year low of rubber on 17 October contributed to the rise, offsetting the potential fall due to auto sales difficulties. Yokohama and Sumitomo saw similar rises, while Toyo Tire and Rubber Co rose 12 per cent to 253 yen. Bridgestone completed its acquisition of an 8.72 per cent stake in Toyo on 16 October. More details are to follow through official channels on 27 October.
Grouptyre has expanded its Wales and South West tyre distribution service through the expansion of member company King David Tyres. The new additional distribution centres will be place in St. Clears, near Carmarthen, and St. Austell, Cornwall to provide multiple same-day deliveries within the South Wales M4 corridor and the valleys and throughout Cornwall.
King David Tyres is a family-owned business established over 30 years and operates retail and wholesale depots in various locations in South Wales, Devon and Cornwall. It serves a large territory incorporating Devon, Cornwall, Avon, Bristol, Somerset, Mid Wales and South Wales, as well as parts of Wiltshire and Gloucestershire.
Stapleton’s (Tyre Services) Limited has agreed to buy 56 Central Tyre stores from Pirelli UK Limited. The deal, with a price-tag to be determined when the transfer of Central’s properties is completed, sees the tyre retailer and distributor expand its retail operation from 45 stores to a new total of 101 throughout the UK. The proposed transaction includes both retail and commercial tyre fitting outlets and the existing Central Tyre workforce is expected to transfer across to Stapleton’s upon completion of the sale. Initially Stapleton’s plans to concentrate on integrating the new stores into its network, meaning the company will be responsible for STS Tyre Pros, STS Tyre & Exhaust and now Central Tyre-branded outlets. It is not clear if and how this might change in the future.
The credit crunch appears to be taking a bite out of the biggest takeover in the tyre world this year. According to various news reports, syndication of the 16.1 billion euro ($21.92 billion) loan behind Schaeffler Group’s bid for Continental AG is “on hold” because of the recent turbulence in credit markets. Unnamed bankers close to the deal told Reuters the loan had been paused while Schaeffler assessed its position. Syndication of the loan is expected to resume when there was clarification of Schaeffler’s strategy, the bankers said.
Later reports quoted a Schaeffler spokesman as saying the company has binding financing commitments from six banks on the deal.
American Tire Distributors has acquired the assets of Remington Tire Distributors (dba “Gray’s Wholesale Tire Distributors”), further enhancing ATD’s service level to tyre retailers across the states of Texas and Oklahoma, according to the company. Gray’s operated two wholesale distribution centres in Texas, one in Houston and one in Fort Worth. These distribution centres service over 3,000 customers across Texas and Oklahoma.
“American Tire Distributors began servicing tyre retailers across Texas and Oklahoma in July of 2004,” said Richard Johnson, chairman and CEO of ATD. “Since that time, we have invested in our facilities, our people and our customers and, as a result, we have gained new customers and market share. The acquisition of Gray’s is another investment that will enable American Tire Distributors to better serve our customers in these two states.” (Tire Review/Akron)
After days of speculation that Michelin may be interested in bidding for Continental AG’s rubber division, the Financial Times has suggested that Bridgestone of Japan “is likely to be a willing buyer.” The Michelin rumours began after the French tyre manufacturer’s managing partner, Michel Rollier, gave interviews to various publications indicating that the company would be interested in bidding for Conti despite the likely cartel implications. The reasons for Bridgestone’s name being linked with a potential Continental rubber acquisition, on the other hand, are to more to do with the company’s lack of comment combined with the free fall of financial markets.
According to the Financial Times, hedge funds associated with Schaeffler’s takeover of Continental are “becoming increasingly nervous about the potential 12 billion (£9.4 billion) deal closing.” The problem is that the recent almost unprecedented falls in stock prices in markets across Europe and the world have affected the deal’s value. When Schaeffler offered 75 euro per Conti share in the summer, it received an unexpectedly high take up. However, on Friday 3 October the Conti shares were trading at 66 euros.
Car parts wholesaler LSUK has gone into administration following a failed takeover attempt by competitor Euro Car Parts. All 53 branches will close, with 600 workers being made redundant. The new owners reluctantly came to the decision “after a considerable amount of non-stop work and investment into LSUK” during the five days following Euro Car Parts’ takeover bid over on 29 September. Despite their efforts Euro Car Parts’ directors realised that they had no option but to place LSUK into administration with effect from Monday 6 October 2008. This includes all 53 LSUK Branches, including MI Diesel Products, Protech Automotive (UK) and Yeovil Rewind.
In a statement on the failure of the deal Euro Car Parts explained its reasons for putting LSUK into administration: “Unfortunately, it became clear, very quickly, that it was simply going to be impossible to continue with investment without the required support, which was not forthcoming.”
Advanced ID Corporation, the parent company of tyre management RFID specialists Pneu-Logic, is predicting it will record a 400 per cent increase in fourth quarter revenues following the acquisition of Shenzhen DDCT Technology Co. The company earlier announced that DDCT has developed RFID readers and modules that are capturing major tenders and orders in their respective RFID sectors. Several contracts have already been negotiated and are seen as the key reason for the predicted growth.
Dan Finch, president and CEO, said: “We are more than pleased with DDCT as our new acquisition. Working with Cherry Lim, our country manager and Mr. Siyou Su, chairman of DDCT, we have received confirmation of projects that will start before the end of 2008. We have funded the infrastructure for our new location in Shenzhen and are completing production and manufacturing on those projects as we speak.” Mr. Su commented in an earlier press release on his projections for 2009 of US$12 Million and is very confident that this will be not only achieved but surpassed for the China market alone.”
Executive Board of Continental AG says it has opened up broader future options for itself by reorganising the duties of its members to greater concentrate on two core business fields. As of October 1, 2008, Continental Executive Board chairman Dr. Karl-Thomas Neumann will take the reins of the Automotive group, consisting of the Chassis & Safety, Interior and Powertrain divisions. On the same day, deputy chairman Dr. Alan Hippe will take on management of the Rubber group, made up of the Passenger and Light Truck Tires, Commercial Vehicle Tires and ContiTech. Conti’s Supervisory Board of the company took assenting note of this new task allocation as decided by the Executive Board on September 30. The Supervisory Board also extended Executive Board member Dr. Hans-Joachim Nikolin’s term of office until May 2014.
The Amtel-Vredestein Sibur-Russian Tyres deal has now officially been called off, according to a company filing to the London Stock Exchange published on 30 September. The plan had been to merge the two companies in order to make a $2 billion a year tyre firm with over 30 per cent domestic market share and access to high performance technology and European markets through Vredestein.
Amtel-Vredestein’s confirmation that the deal is off followed news reports that the deal was faltering due to a lack of the credit necessary to fulfil the deal’s financial terms and conditions. However, the statement also struck an optimistic note: “The company is actively considering a number of options and it is expected that a further announcement will be made in due course.” Yesterday Amtel-Vredestein’s press department in Russia told Tyres & Accessories that the company had not walked away from the deal. “It is an ongoing work in progress,” they explained.
UK tyre market analysts, Plimsoll Publishing are characterising the difficult market conditions of 2008 as a recipe for failure, with companies facing a stark choice: hold on to sales at reduced margins, or reduce in size and scale. To put this into context, 67 of the 201 firms analysed in the company’s latest report are losing money, a direct consequence of rising costs and price reductions set against a slowing market. The net effect? Increased merger and acquisition activity.
Senior analyst David Patterson points to the amount of tyre manufacturers and distribution firms using an overdraft as a permanent means of finance as a dangerous position for any companies to place themselves in. The banks are taking a critical look at all unsecured finance and are reassessing their exposure to small businesses- this could leave these firms in a position where their overdraft would need paying back on demand. Acording to Patterson, many of these firms simply cannot afford to do this.
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