Amtel Completes Vredestein Acquisition
Amtel Holdings Holland NV has completed its acquisition of Vredestein Banden BV from Vredestein Investment Consortium (VICO) for 195.6 million euros in cash. Amtel says it plans to use the opportunity to expand its global operations in Europe, Asia, the former Soviet Union and North America. Combined production capacity will now amount to around 22 million tyres a year.
When Tyres & Accessories met with Sudhir Gupta, chairman of Amtel’s supervisory board, earlier this year he gave some details of what might happen as a result of the acquisition. Perhaps the most significant development will see the companies take advantage of their newfound synergies. Consequently, in the future all 13 to 16 tyres will be produced in Russia and it is very likely that this will include Vredestein passenger tyres as well as the company’s second brand Maloya. This will free up Vredestein to concentrate on its high and ultra high performance products.
Commenting on the finalisation of the purchase Dr Gupta, said: “We believe that this acquisition will contribute significantly to the successful development of Amtel as a pan-European company. The combined entity benefits from the Vredestein brand that has an international reputation for quality as well as access to manufacturing skills and expertise driving our ability to compete effectively at all levels of the market, both in Russia and abroad.”
Further illuminating the company’s motivation for purchasing the company Amtel CEO Alexei Gurin added: “This acquisition provides us access to technology and manufacturing expertise, European and North American distribution networks, a unique and market-focused product mix and additional management and human resource capabilities,”
In 2004 Vredestein Banden had total sales of more than 230 million euros across its four product groups (passenger car and delivery van, bicycle, agricultural and industrial tyres). The company has sales offices operating throughout Europe and it is also represented in the US and Canada. About 30 per cent of what the company produces is sold in Germany.
“Vredestein Banden will continue to focus on manufacturing high-and ultra-high performance tyres, as well as R&D and industrial design programmes,” commented Robert Oudshoorn, Vredestein Banden’s CEO. “The combination of Amtel and Vredestein Banden should provide employees with exciting opportunities to work in a wide area of different disciplines. We look forward to working closely to achieve a successful integration of both companies.”
Amtel is one of Russia’s largest tyre manufacturers, with a significant share of the Russian tyre production market and of car and light-truck tyres, the most profitable market segment. The group includes three tyre factories in Russia: the Amtel-Povolzhye (Kirov), the Amtel-Chernozemye (Voronezh) and the Amtel-Sibur (Krasnoyarsk) ‘Tire Complexes’. It also includes two chemical facilities in Russia Amtel-Kuzbass (Kemerovo), Amtel-Karbon (Volgograd Carbon Black Plant) and Rosava, the largest Ukrainian tyre manufacturing company.
According to the company, Amtel’s overall tyre output reached 14.4 million in 2004, which is a 21 per cent increase over 2003. Previously, shares in Amtel were divided between Templeton Strategic Emerging Markets Fund and Sudhir Gupta himself. That was until October 2004, when the company sold 9.7 per cent to selected institutional investors in Europe, the US and Russian in a private placement.