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Time To Hit The Acquisition Trail?

Hardly a day goes by without some tale or other of economic woe – the sub prime crisis, falling stock markets worldwide; all the indicators suggest that this is a time to batten down the hatches and ride out the storm. However, analysts Plimsoll Publishing have just produced their annual acquisition survey of the Tyre Manufacturers & Distributors industry and their message is that, for the strongest companies in the market, this could be the ideal time to buy a competitor.

26th March 2008/by Tyrepress Editors

Kumho to Receive $250,000 Incentive for US Plant Establishment

The city in the US state of Georgia where Kumho is to set up a new factory has approved a US$250,000 incentive package. A Macon City Council committee agreed to the request in response to the incentive deal previously promised by local officials, in which permits and fees related to the plant’s construction would be waived.

The council says that its policy is not to exempt companies from the payment of permits and fees, so officially the quarter million dollars will be cash contributed to the $12.5 million Kumho has set aside to pay for acquisition of the Macon site plus various infrastructure and preparation expenses.

25th March 2008/by Tyrepress Editors

Amerityre Acquires Kik Technology Assets

Amerityre Corporation has bought “a significant portion of the manufacturing assets of Kik Technology, Inc. (Kik), itself a polyurethane foam tyres maker. The assets acquired include tyre models and moulds used by Kik to produce low-duty cycle polyurethane foam tyres. Kik will cease business operations.

“The acquisition of the models and moulds provides Amerityre with the capability to produce a broader range of products to better service the low-duty cycle tire market,” commented Dr. Gary N. Benninger, Amerityre’s President and Chief Executive Officer. “With this expanded variety of tire products and sizes, Amerityre will now be able to offer its customers a Flatfree tyre for every application. For its fiscal year 2006 (February 1, 2006 to January 31, 2007) Kik reported foam tyre product sales of $1,857,666 and $937,645 for the nine month period ending October 31, 2007,“ he added.

19th March 2008/by Tyrepress Editors

Wennemer Quashes Siemens VDO Renegotiation Rumours

Continental AG reports its new year has got off to “a very convincing start”, and adds that, contrary to stories appearing in the media, it sees no reason to reopen negotiations with Siemens over the VDO unit. Furthermore, the company holds a positive outlook for its 2008 targets. “We shall set forth our streak of success,” stressed CEO Manfred Wennemer on March 14. “In the first two months our sales and results far exceeded our forecasts and were well ahead of the previous year’s figures. We reaffirm our prognosis: Overall sales of more than 26.4 billion euros; a consolidated EBIT margin of 9.3 per cent before amortisation from the purchase price allocation and before integration and restructuring expenses. In addition we assign the very highest priority to cutting away at our debt. As planned, we shall apply our robust free cash flow to the reduction.”

14th March 2008/by Tyrepress Editors

Wennemer Quashes Siemens VDO Renegotiation Rumours

Continental AG reports its new year has got off to “a very convincing start”, and adds that, contrary to stories appearing in the media, it sees no reason to reopen negotiations with Siemens over the VDO unit. Furthermore, the company holds a positive outlook for its 2008 targets. “We shall set forth our streak of success,” stressed CEO Manfred Wennemer on March 14. “In the first two months our sales and results far exceeded our forecasts and were well ahead of the previous year’s figures. We reaffirm our prognosis: Overall sales of more than 26.4 billion euros; a consolidated EBIT margin of 9.3 per cent before amortisation from the purchase price allocation and before integration and restructuring expenses. In addition we assign the very highest priority to cutting away at our debt. As planned, we shall apply our robust free cash flow to the reduction.”

14th March 2008/by Tyrepress Editors

Conti May Re-Negotiate Siemens VDO Purchase

Continental AG may be looking at renegotiating its 11.4 billion euro acquisition of the Siemens VDO unit. Reuters has reported that a “source close to the matter” gave the news agency this information on March 12.

Reuters quotes the source as saying “In the Powertrain division, there are significant problems” – apparent confirmation of an article published that day in the Hannoverschen Allgemeinen Zeitung newspaper. The source added that Conti “would have to negotiate with Siemens because Siemens did not sufficiently inform Continental before the acquisition.”

13th March 2008/by Tyrepress Editors

Dear Prime Minister – Conti Asks Tanzania’s Govt. to Aid GTEA

Continental is reported to have requested the government of Tanzania take action to aid the moribund General Tyre East Africa (GTEA), in which the German tyre major holds a 26 per cent share. Furthermore, Conti is said to have informed Tanzania’s Prime Minister, Mr. Mizengo Pinda, that without assistance a complete closure of GTEA may be required by March 31, 2008.

An article that appeared in East African Business Week on March 10 indicates that, according to “reliable information”, Continental wrote to Mr. Pinda in mid-February, asking his government to honour the commitments agreed upon nine months earlier. The country’s sole tyre manufacturer suspended its 400 employees without pay towards the end of 2007, and is said to need at least US$10 million before production can resume. However, Mr. Said Nguba, press secretary to Mr. Pinda, told the business newspaper in early March that he had no knowledge of the letter. “I’m not in office and I’ve yet come across such information,” stated Nguba.

12th March 2008/by Tyrepress Editors

European Commission Approves Brose Acquisition of Conti Units

The European Commission has approved the purchase of Continental’s electric motor device and cooling fan businesses by German company Brose. The electric motor device business was acquired by Conti when it purchased the Siemens VDO unit, and its purchase by Brose was agreed upon in mid-December. The business specialises in electric motors for window regulators, anti-lock braking systems, heating/ventilation, engine cooling and electric power steering.

11th March 2008/by Tyrepress Editors

Moody’s Downgrades Conti’s Long-Term Rating

Moody’s Investors Service has downgraded the long-term rating of Continental AG and its units to ‘Baa2’ following the company’s marked increase in debt and leverage resulting from the 11.4 billion euro acquisition of the Siemens VDO unit. The ratings agency said the downgrade concludes its July 26, 2007 review regarding a possible downgrade following the company’s announcement of the intended acquisition. Moody’s added that the one notch downgrade is in line with its previous announcement of a limited downward revision and takes into account the company’s recent track record of successfully integrating larger acquisitions.

27th February 2008/by Tyrepress Editors

Continental Relaunches ContiNetwork CV Tyre Retail Business

Continental has relaunched its ContiNetwork UK commercial vehicle tyre retail operation. The new-look ContiNetwork numbers 55 members, covering 75 specific territories across the UK. 12 members were lost during the transition period, being replaced by a further 12. According to Continental Tyre Group commercial vehicle sales and marketing director Arthur Gregg, the updated network offers a more balanced offering for dealer partners; and allows the flexibility for dealers to custom-make partner arrangements.

27th February 2008/by Tyrepress Editors

Uniwheels to Purchase European ATS Alloy Wheel Operations

Swiss based alloy wheel manufacturer Uniwheels has announced it intends to purchase the European interests of Germany’s ATS Group. The acquisition will include the three ATS facilities in Germany, along with the company’s Polish subsidiary, which operates two factories. A separate solution for the company’s US subsidiary, ATS Light Alloy Wheels (Alabama), Inc. will be announced next week.

22nd February 2008/by Tyrepress Editors

2007 Another Record Year for Conti

Continental AG is boasting its sixth consecutive year of record sales and earnings figures in 2007, and the company’s Executive Board chairman has expressed confidence this favourable pattern will continue. “We intend to consistently continue our record streak this year,” said Manfred Wennemer at a press conference on February 21. “Despite the clouds hanging over the economic environment, we are setting clear targets: strengthened by our Siemens VDO acquisition, in 2008 we intend to improve the total calculated sales generated in 2007 of around 26.4 billion euros….With Continental in its traditional setup, we have kept the promises we made. In the new company era, this will not change.”

21st February 2008/by Tyrepress Editors

2007 Another Record Year for Conti

Continental AG is boasting its sixth consecutive year of record sales and earnings figures in 2007, and the company’s Executive Board chairman has expressed confidence this favourable pattern will continue. “We intend to consistently continue our record streak this year,” said Manfred Wennemer at a press conference on February 21. “Despite the clouds hanging over the economic environment, we are setting clear targets: strengthened by our Siemens VDO acquisition, in 2008 we intend to improve the total calculated sales generated in 2007 of around 26.4 billion euros….With Continental in its traditional setup, we have kept the promises we made. In the new company era, this will not change.”

21st February 2008/by Tyrepress Editors

Bekaert to Acquire 100% Ownership of Turkey’s Beksa

Multinational manufacturer of tyre reinforcement and other materials, NV Bekaert SA, has announced its upcoming acquisition of the 50 per cent share in Turkish steel cord and metal fibre manufacturer Beksa Celik Kord Sanayi ve Ticaret A.S that it currently holds jointly with Turkish conglomerate Haci Ömer Sabanci Holding A.S. The two companies have signed a letter of intent for the transfer of shares, a transaction estimated to be worth 40.3 million euros, and when the deal is complete Bekaert will assume full ownership of Beksa. The transfer of shares will be executed after receiving approvals from the respective authorities, Bekaert reports.

Located in the city of Izmit, Beksa manufactures steel cord products and Dramix metal fibres for a variety of industrial applications, including the tyre and automotive industry. The company employs about 330 people and recorded sales of 80 million euros in 2006.

20th February 2008/by Tyrepress Editors

Eliokem Buys Apar Polymer Division

Eliokem, the global specialty chemical company, has completed the acquisition of the Polymer Division from Apar Industries Ltd, India on 15 February 2008 for 1.11 billion Indian rupees (14.2 million pounds; 19 million euros; US$ 28 million). Following the acquisition Eliokem’s global revenues will reach € 200 million for a combined capacity in excess of 100,000 tons of polymer.

According to the company, the plant, located in the petrochemical zone in the Western Indian state of Gujarat, complements Eliokem’s offering in nitrile polymers and polyblends styrene butadiene reinforcing resins and latices for serving the tyre and rubber industries.

15th February 2008/by Tyrepress Editors