PARIS (April 6, 2001) — Group Michelin has agreed to buy two tire plants, a retread plant and a domestic distribution network in Romania from Tofan Grup, the local enterprise that had taken over the bulk of Romania´s state-controlled tire industry after the collapse of communism there in 1990.
Pending completion of the deal — expected in only a few weeks — Michelin will take over passenger car tire operations at the Victoria plant in Floresti, the Silvania truck tire plant in Zalau, a retread plant and 20 warehouses. The deal, terms of which were not disclosed, also taps Michelin into Tofan´s 2,000-outlet Automaxima retail network. "The Romanian transport and car sectors are markets with strong potential for development," said Michelin Chairman Edouard Michelin, who noted that Tofan´s Montana car tires and Tofan truck tires controlled majority market shares in Romania.
Michelin did not commment on the expected sales volume of the businesses being acquired. Overall, Tofan reported annual sales of approximately $200 million the past few years.
Tofan retains its agricultural and implement tire businesses, and will embark on a major expansion of these activities — located primarily at the Danubiana plant in Bucharest — following completion of the sale, according to Nomura International Inc., a merchant banking group that holds a "substantial" equity stake in Tofan.
Michelin´s acquisition "will further raise the quality of Romanian exports and introduce more competition to the developing domestic tire sector," commented Declan Walsh, director of Nomura´s merchant banking group, in the firm´s statement.
Nomura will continue as a shareholder in Tofan, along with the Tofan family and six other independent shareholders, based in Romania, Nomura said.