Amtel Group has completed its acquisition of Vredestein Banden N.V., paying the Dutch tire maker's parent company $256 million in cash.
The acquisition will ``contribute significantly'' to Moscow-based Amtel's becoming a pan-European company, said Amtel Chairman Sudhir Gupta.
Buying Vredestein provides Amtel access to technology and manufacturing expertise, European and North American distribution networks, a market-focused product mix and additional management and human resource capabilities, said Amtel CEO Alexei Gurin.
``Vredestein Banden will continue to focus on manufacturing high- and ultra-high performance tires, as well as R&D and industrial design programs,'' said Robert Oudshoorn, Vredestein Banden CEO. ``The combination of Amtel and Vredestein Banden should provide employees with exciting opportunities to work in a wide area of different disciplines.''
Amtel concluded the deal through its Amtel Holdings Holland N.V. subsidiary.
The addition of Vredestein will boost Amtel's annual production capacity more than 50 percent to about 22 million tires at five plants-three in Russia and one each in Ukraine and Netherlands. Amtel also controls a carbon black and a chemical plant in Russia and reports annual sales of more than $350 million.
Enschede, Netherlands-based Vredestein reported 2004 sales of $286 million. Its plant makes more than 17,000 car, light truck, farm and industrial tires a day.
Vredestein, an independent company since 1946, is represented in North America by Vredestein Tyres North America in Metuchen, N.J.
In 2004 Amtel repored sales growth of 18 percent to $451 million and wrapped up a three-year, $200 million capacity enhancement program for its plants in Russia. ``2004 was another exceptional year for Amtel,'' Mr. Gupta said. ``We significantly increased production capacity, sales, profits and market capitalization.''
Amtel made more than 14 million tires in 2004, Mr. Gurin noted, adding that this 21-percent year-on-year increase resulted from the addition of the Amtel-Chernozemye I production line, in which Amtel invested more than $50 million in 2004.
Amtel claims its 2004 output gives it a 28-percent share in the Russian tire market, with 35 percent of the car/light truck sector-the most profitable market segment.
``In 2006, when construction is completed on the Amtel-Chernozemye II greenfield in Voronezh, total tire output companywide will reach 20 million tires per year,'' Mr. Gupta said.
Amtel's Amtel-Povolzhye Kirov tyre complex reached full capacity in 2004. This plant makes Fortio-brand tires under an offtake agreement for Bridgestone.
By 2005, the Chernozemye II unit will make 3 million high-speed, low-profile tires a year for passenger cars and SUVs to replace imports, the firm said.