KORTRIJK, Belgium (Feb. 1, 2010) — Bridgestone Corp. has agreed to sell its steel cord activities in Italy and China to N.V. Bekaert S.A. for about $97 million and negotiated a long-term supply agreement with the Kortrijk-based independent steel cord producer.
The transaction, still subject to customary closing conditions, is expected to close in the second quarter, the parties said.
Calling the deal a “realignment” of its steel cord activities, Bridgestone said the deal will allow it to increase its focus on developing innovative materials for use in the company's strategic tire products within a more streamlined operation, all while securing a stable supply of standard steel cord specifications from an external supplier with whom it has a strong relationship.
The assets in question are Bridgestone Metalpha Italia S.p.A. and Bridgestone (Huizhou) Steel Cord Co. Ltd. The share deal includes all of the personnel and assets of the manufacturing sites in Cagliari, Sardinia, Italy, and Huizhou, China, respectively.
The Cagliari plant has annual capacity of 27,000 metric tons with 270 employees; the Huizhou plant is capable of 13,000 tons annually with 161 employees.
The deal does not affect Bridgestone's other steel cord activities in Japan or North America.
Bekaert CEO Bert De Graeve said the deal will lead to “enhanced cooperation and supply with a leading customer and will significantly advance Bekaert's strategy of building and growing a global tire cord business.”
Bekaert has been a key supplier of steel cord to Bridgestone for many years, including being a partner in the past in a steel cord joint venture.
Bridgestone operates five other steel cord factories around the world—in the U.S., Thailand, Japan (two plants) and a second plant in China, in Shenyang.
Bekaert is active in advanced metal transformation and advanced materials and coatings. It generates annual sales of about $5.5 billion.