Amtel-Vredestein/Sibur Merger in Trouble
The proposed merger of Russian tyre manufacturing giants Amtel-Vredestein and Sibur Russian Tyres looks to be faltering after reports from news agencies Interfax and Reuters suggested Sibur had walked away from the deal. The plan had been to merge the two companies in order to make a $2 billion a year tyre firm with 30 per cent domestic market share and access to the European markets through Vredestein.
Reuters quoted an unnamed source as saying: “As far as I understand Sibur decided not to move forward with the initial agreement.” Sibur Russian Tyres representatives could not be reached for commented. However, Amtel-Vredestein’s press department in Russia told Tyres & Accessories that Amtel had not walked away from the deal. “It is an ongoing work in progress,” they explained.
The Reuters report had suggested the deal had fallen down due to a shortage of credit in the current financial markets. “One of the conditions of the initial agreement was to raise $50 million from the debt market, which in these market conditions has proven impossible,” the source told Reuters.
The initial agreement placed four conditions on the merger deal. One of the conditions was to raise $150 million, $50 million of which was to come from a closed subscription of new ordinary shares of Sibur.