Tire giant acquires Indonesian manufacturer for 100 million yuan
Starting from the end of 2024, the actions of foreign-funded tire companies have changed? Yes!
After two years of business divestiture and closing factories with low operating efficiency, foreign-funded tire companies have begun to expand their scale again. This also means that the demand for tires is still not saturated. At least in the eyes of the giants, there is still a need for capacity expansion.
On December 24, 2024, Michelin announced that it would acquire Indonesian tire manufacturer Multistrada.
Michelin's 126 million acquisition begins
The group has allocated 278.71 billion rupiah (126 million yuan) to acquire shares in Indonesian tire manufacturer Multistrada, accounting for 0.36% of the company's total shares.
According to the acquisition offer document, the acquisition offer price is set at 8,400 rupiah (3.8 yuan) per share, a premium of 41% over the average transaction price. Michelin said the offer will take effect on January 10, will be valid for 90 days, and the payment date is scheduled for February 18. The issued shares are currently held by independent shareholders.
It is reported that Michelin's investment is part of the Indonesian tire manufacturer's "privatization" plan. Michelin's acquisition can transform Multistrada into a "private company" and improve its competitiveness by "quickly responding to and responding to the diverse needs of the global tire market" after flexibly integrating into Michelin.
Michelin can "internal integration to enable various parts of its global operations to share resources." After the transaction is completed, Michelin will hold 99.64% of Multistrada's shares, an increase of 80%.
In 2023, the Indonesian tire manufacturer's sales were US$489 million (RMB 3.584 billion) and its revenue was US$75 million (RMB 550 million).
And this is not Michelin's first investment plan in December.
Michelin North American Investment
On December 10, 2024, a planning meeting minutes in Lexington, South Carolina showed that local authorities were ready to negotiate with Michelin on its local factory expansion plan. In some of the latest local documents, it can be seen that Michelin is studying the investment of capacity expansion in North America, with an investment amount of about US$159 million (RMB 1.16 billion).
According to the city council, the negotiations between local relevant departments and Michelin will involve a "cost agreement". This negotiation usually includes "tax incentives for business investment".
According to the data, Michelin's plant in Lexington, South Carolina involves the production of passenger car, light truck and bulldozer tires, with a nameplate capacity of 288,200 tons per year.
The increase in capital of American factories has been relatively rare in the past two years. In fact, in the past two years, we have heard more about cautious investment and even the closure of factories regarding US capacity. Therefore, Michelin's expansion plan has attracted widespread attention in the industry. If this investment is implemented, then as a leading tire company, whether it is possible to lead a new round of US capacity investment trend, the tire business will continue to follow up on relevant news.
