KUALA LUMPUR, Malaysia (June 26, 2002) – Continental A.G. has agreed to buy a 30-percent stake in Sime Darby Berhad's tire activities – DMIB Berhad and Sime Tyres International – which are being brought together under a common unit to be known as Merit Manufacturing Sdn. Bhd.
Continental and Malaysia's Sime Darby signed a memorandum of understanding covering the deal in Kuala Lumpur June 26. The deal includes options for Conti to increase its ownership stake over time, Continental said.
The move will strengthen Conti's manufacturing and distribution position in Asia at a time when the Pacific Rim nations are trying to put together an Asian free trade zone similar to the North American Free Trade Association, a Conti spokesman said.
A combined DMIB-Sime Tyres entity would report sales of more than $200 million annually. DMIB recently ceased operations at its Simex Aircraft Tyre Co. subsidiary.
Conti and Sime Darby agreed in January for Continental to supply DMIB and Sime Tyres with technical assistance, following the termination of a 17-year-old technology agreement Sime Darby had with Sumitomo Rubber Industries Ltd.