Romanian tyre plants are snapped up by Michelin, as Tofan focuses on agricultural sector.
Tofan Grup of Romania is selling its truck and passenger car tyre making facilities, domestic distribution network and retreading unit to Groupe Michelin. The sale, for an undisclosed sum, was announced 6 April by Nomura International plc, a major shareholder in the Romanian tyre group.
Michelin will take over passenger car tyre operations at the Victoria plant in Floresti, the Silvania truck tyre plant in Zalau, a retread plant and 20 warehouses. The deal, terms of which were not disclosed, also links Michelin into Tofan's 2000-outlet Automaxima retail network.
Following the sale, Tofan will focus on a major expansion of its agricultural and implement tyre business," said Nomura. The finance house will remain as a shareholder in Tofan, along with the Tofan family and six other independent shareholders, based Romania, said the Nomura spokeswoman.
Michelin's acquisition of these parts of Tofan Grup, "will further raise the quality of Romanian exports and introduce more competition to the developing domestic tyre sector," commented Declan Walsh, director of the Nomura merchant banking group, quoted in the firm's statement.
"Tofan is an interesting deal for Michelin," said a spokesman for the French tyre group, who put the acquisition price at below the annual turnover of acquired business, estimated at around $80 million. The Tofan business will benefit from coming under a single owner, he added.
The French tyre group aims to retain the Tofan brands Montana and Tofan Steel which will be supplied to the domestic market and elsewhere in Eastern Europe, including Russia, according to the spokesman.
The company will not produce Michelin-brand tyres in Romania, for the short term at least, but could use Romania to manufacture other brands produced in Eastern Europe, he added.
Nomura has held "a substantial stake" in Tofan since 1997, having originally acquired 49 percent of the company's shares, according to a Nomura spokeswoman. The sale to Michelin is expected to be complete by the end of April, she added.
Tofan acquired the bulk of Romania's state-controlled tyre industry after the collapse of communism in the country in 1990.
Raleigh Patrick. "Michelin to acquire Tofan car/truck tyre unit." European Rubber Journal May 2001; v183 i5 p2.