French company Michelin has announced the signing of an agreement for the acquisition of 80 percent stake in the company PT Multistrada Arah Sarana TBK, a leading tyre manufacturer in Indonesia. The production capacity of the Indonesian enterprises of the company allows to produce annually more than 180 thousand tons, including 11 million tyres for passenger cars, 9 million tyres for two-wheeled vehicles and 250 thousand tires for trucks. By the end of 2017, the net proceeds of the company’s Multistrada amounted to 281 million dollars.
Sale Multistrada will allow Michelin to not only strengthen its presence in the fast-growing Indonesian market, but also to acquire very competitive local company with quality equipment and the existing production capacity. Using his extensive technical experience coupled with financial investment in dosed quantities, Michelin will gradually transform the company from the issuance of budget car tires on the model of tires in the middle price category of their subsidiary brands.
In addition, in the framework of the acquisition of the company’s Multistrada French Michelin acquires 20% stake in local retailer PT Penta Artha Impressi, which will improve marketing and increase sales tire brands of Michelin Group in Indonesia, providing easy access to the local market and good opportunities for further growth.
“The acquisition of the company’s Multistrada Michelin opens a great opportunity to expand its operations in Indonesia, the most populous country in Southeast Asia, and immediately start the production of competitive products of good quality without creating any new capacity,” said chief Executive officer Michelin Group Jean-Dominique sénart.
“We are very proud of what we have achieved and are confident that Michelin is the ideal partner for the transition of the company’s Multistrada in a new period of development and prosperity for the benefit of all stakeholders and employees”, – said General Director of Multistrada Pieter Tanuri.
The expected synergies in the next three years after the acquisition of the French company of the Indonesian kinoproizvoditeley will be about $ 70 million. For a package of 80 percent of the stock Multistrada Michelin will pay 439 million dollars. The purchase will be funded by internal financial resources of the company and is expected to have no impact on the ratings of Michelin.