HANOVER, Germany (June 1, 2004) — Continental A.G. has agreed to sell its agricultural tire business unit to CGS Group of Czech Republic, the maker of Mitas-brand farm, industrial and motorcycle tires. Terms of the deal were not disclosed.
CGS Group, which also includes Rubena industrial rubber products and Buzuluk rubber processing machinery, will integrate Conti's ag tire unit into its own tire division, which operates plants in Prague and Zlin.
Continental said it views this to be a good opportunity for the unit to attain a better position internationally, since CGS is working on developing its areas of industrial, agricultural and motorcycle tires. At the same time, Continental said this reflects its strategy of leaving business sectors that it does not consider core.
The companies have concluded agreements governing the use of the Continental, Semperit, Barum and Euzkadi trademarks by CGS. For the transitional period, Continental will assist in several areas to ensure continuity in the wide variety of services provided to customers.
Continental makes agricultural tires at its plant in Otrokovice, Czech Republic, which also makes Barum-brand tires. The firms did not say whether production would be transferred to CGS plants.
CGS stands for CeskÃ¡ GumÃ¡renskÃ¡ Spolenost. The Prague-based firm reported sales of farm, industrial and construction tires of $75.5 million in 2002.