Amtel-Vredestein Sibur Deal Off
The Amtel-Vredestein Sibur-Russian Tyres deal has now officially been called off, according to a company filing to the London Stock Exchange published on 30 September. The plan had been to merge the two companies in order to make a $2 billion a year tyre firm with over 30 per cent domestic market share and access to high performance technology and European markets through Vredestein.
Amtel-Vredestein’s confirmation that the deal is off followed news reports that the deal was faltering due to a lack of the credit necessary to fulfil the deal’s financial terms and conditions. However, the statement also struck an optimistic note: “The company is actively considering a number of options and it is expected that a further announcement will be made in due course.” Yesterday Amtel-Vredestein’s press department in Russia told Tyres & Accessories that the company had not walked away from the deal. “It is an ongoing work in progress,” they explained.
Amtel-Vredestein entered into the acquisition agreement with OJSC Sibur Holding and OJSC Sibur-Russian Tyres on 30 June 2008. The small print included terms and conditions which had to be fulfilled by 30 September (the deal’s so-called long stop date). One of these conditions is the execution of subscription letters in respect of US$100 million of new shares in the company in addition to the US$50 million new shares to be subscribed by SIBUR Holding. According to Amtel’s statement, “as this and some other conditions have not been fulfilled or waived by midday on the long stop date, and as there has been no agreement to extend the long stop date, the agreement has automatically terminated in accordance with its terms.”