Published On: Sat, Mar 9th, 2019

Michelin acquires 88% stake in Indonesian tire manufacturer Multistada

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French tire manufacturer Michelin has completed its previously announced acquisition of a stake of 88% in Indonesian tire manufacturer Multistrada Arah Sarana for $480 million, after securing all the required approvals.

The deal was announced by Michelin in late January in a move to gain competitive production capacity of over 180,000 tons and to bolster its footprint in the rapidly growing Indonesian market.

Multistrada, which has a capacity of manufacturing more than 11 million passenger car tires, nine million two-wheel tires, and 2,50,000 truck tires, registered $281 million in net sales in 2017.

Through the transaction, Michelin also gets a 20% stake in Indonesian tire retailer Penta Artha Impressi along with 50 hectares of available land.

French tire manufacturer Michelin acquires controlling stake in Indonesian tire manufacturer Multistada

French tire manufacturer Michelin acquires a controlling stake in Indonesian tire manufacturer Multistada. Photo courtesy of Fabien1309/Wikipedia.org.

The French tire manufacturer has also acquired the local brands – Achiles and Corsa and a competitive local plant with quality facilities and immediately available production capacity as part of the transaction.

Michelin plans to convert production from Tier 3 Passenger car tires to Tier 2 Michelin Group brands gradually. This will enable more Tier 1 production at other Asian tire manufacturing plants and address the growing demand for Tier 2 volumes in Europe, Asia and North America, said the French tire manufacturer.

Michelin said that it is looking to acquire the remaining 12% stake in Multistrada, which is a publicly listed company. The French company said that it has launched a public offer to buy out the remaining shares in Multistrada at the same price per share offered for the 88% stake.

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