PALM BEACH GARDENS, Fla. — The joint wholesale business venture involving Michelin North America Inc. (MNA) and Sumitomo Corp. of Americas (SCOA) has passed regulatory scrutiny, clearing the way for the companies to proceed with activating the venture, called National Tire Wholesale (NTW).
With the closing on April 5, Michelin's TCi business is considered an operating company of TBC, and the parties can now proceed with the process of merging TCi with TBC's Carroll Tire unit to form NTW, a TBC representative said.
Michelin disclosed the deal's approval in its first quarter financial filing documents with a simple "deal approved" stamp on a slide about the venture.
NTW is set to become the second-largest player in the U.S. wholesale tire market, the parties said earlier, combining Michelin's 85 TCi and TBC Corp.'s 59 Carroll Tire wholesale distribution locations. The business is expected to handle up to 15 million tires a year.
Technically speaking, Michelin is acquiring a 50-percent stake in TBC Corp. as part of the deal, which includes TBC's retail and proprietary brand operations as well as the creation of the new entity NTW Wholesale, the companies said earlier. 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.
The deal also includes TBC de Mexico, with 43 distribution centers throughout that country. TBC's retail business is unaffected by the creation of the joint venture, which will be based in Palm Beach Gardens, where TBC is headquartered.
Don Byrd — president and chief operating officer (COO) of TCi — will be president and COO of NTW. He will report to President and CEO Erik Olsen under the TBC management structure.