GREENVILLE, S.C. — Michelin North America Inc. (MNA) and Sumitomo Corp. of America (SCOA) have agreed to combine Michelin's wholesale distribution activities with TBC Corp.'s wholesale assets in a venture to be called National Tire Wholesale (NTW).
The new venture — which the new partners said would become the second-largest player in the U.S. wholesale tire market — will be considered an operating unit of TBC, which will be owned 50-50 by Michelin and SCOA.
The NTW business will combine Michelin's 85 TCi Tire Centers and TBC Corp.'s 59 Carroll Tire wholesale distribution locations.
Together the businesses will distribute nearly 15 million tires, valued at an estimated $2 billion-plus.
American Tire Distributors Inc. is considered the largest U.S. wholesaler, with distribution of 32 million tires annually and sales in excess of $5 billion.
The deal, which also includes TBC de Mexico, is subject to customary approvals and could close in the first quarter. Michelin will pay SCOA $630 million in addition to the TCi Wholesale assets to the venture to match the $1.52 billion in "enterprise value" of TBC's assets.
Michelin Chairman and President Scott Clark told Tire Business that TBC's retail business is unaffected by the creation of the joint venture.
"The focus for us has been increasing the size and scale of the brand offering and geographic footprint of the wholesale business through NTW," Mr. Clark said.