STOCKHOLM, Sweden — Michelin Group and Scandinavian Enviro Systems A.B. have finalized the details of their previously disclosed tire-recycling strategic partnership, nearly six months later than originally expected.
Under terms of the agreement Michelin is now entitled to establish its own recycling plants based on Enviro's technology in addition to a jointly-owned tire recycling plant the two companies are planning to set up.
The companies announced the intended partnership in April for the use of Enviro's technology for recovering waste rubber materials. As part of the deal, Michelin acquired a 20% stake in the Swedish company.
When establishing its own plants, Michelin shall pay an upfront lump sum to Enviro with a predetermined, fixed non-recurring amount as well as royalties based on a percentage of the plant's sales.
The license agreement shall remain in force until 2035, according to Enviro, which is also entitled to continue establishing recycling plants with other parties.
"Despite the pandemic and the ensuing delays, we have now been able to finalize our agreement regarding a strategic partnership with Michelin," Enviro Chairman Alf Blomqvist said.
The agreement was "a very important milestone" for Scandinavian Enviro Systems and a "very significant validation of our technology," he said.
"We have managed to reach these main principles agreements in a year where the unprecedented sanitary situation has made it very difficult to 'sit together' and plot the course for our future collaboration," he noted.
While negotiations were stalled due to COVID-19, Mr. Blomqvist said the delay gave more time to Michelin and other international manufacturers to test Enviro's recovered carbon black.
The agreement is subject to a final approval by Enviro's shareholders at an extraordinary general meeting, scheduled for January.