Bridgestone Buys Bandag for US$1.05 billion
Bridgestone’s North American subsidiary, Bridgestone Americas Holding (BSAH), has bought Bandag Incorporated for US$1.05 billion. The deal sees the two companies enter into a merger agreement pursuant to which BSAH will acquire the outstanding shares of each class of Bandag stock for US$50.75 per share in cash. Bandag’s Board of Directors unanimously approved the agreement. The transaction is expected to be completed late in the first quarter or early in the second quarter of 2007, subject to the receipt of shareholder and regulatory approvals and the closing conditions. In 2005 Bandag had worldwide sales of US$921 million.
Following completion of the transaction, Bandag will operate as a wholly owned subsidiary of BSAH. “Through shared resources of tyre and retread technologies, the end user will have the benefit of better products and services…expanding the retread business through the combination of the Bridgestone Group and Bandag can lead to a more effective utilization of natural resources and minimize the number of tyres that might be prematurely taken out of service, all of which contributes to the well-being of our environment,” the companies said in an official statement.
Bandag, one of the best known names in tyre retreading materials and equipment, has recently lost market share, particularly in the European markets. Based in Muscatine, Iowa, United States, Bandag has a global network of more than 900 franchised dealers in over 90 countries that produce and market retread tyres and provide tyre management services. Currently, it also operates 10 plants, with locations in the United States, Belgium, Brazil and Mexico.
In addition, Bandag owns and operates Tire Distribution Systems, Inc. (TDS), a commercial retail operation which sells and services new and retread tyres, and holds an 87.5 per cent interest in Speedco, Inc., a provider of on-highway lubrication and routine tyre services to commercial truck owner-operators and fleets.