ENSCHEDE, Netherlands (BRAIN)—Amtel-Vredestein, the Netherlands automotive and bicycle tire maker, has agreed to be acquired by Sibur Holding, owner of Sibur Russian Tires, in a $370 million deal that assures the financially troubled Dutch company’s future.
If it has any noticeable effect on Vredestein’s two-wheel tire making operation, the transaction will probably be positive, said James Winchester, Vredestein’s brand manager at Veltec Sports. Veltec is the Dutch tire brand’s exclusive U. S. distributor, importing its high-end lines.
“Vredestein’s already been investing more in the two-wheel division, and we’ll be seeing the fruits of that labor soon, probably in the spring. They’ve put some money into that, and retailers here will probably see better availability in the coming season,” Winchester said.
“I’ve never gotten any impression that the two-wheel division was in trouble. This has mostly to do with the automotive side of the business in Russia,” he added.
Vredestein still makes its bicycle, scooter and moped tires in the Netherlands, but had shifted much of its automotive tire production to factories in Russia and is deeply in debt.
Amtel-Vredestein’s official statement said the transactions are “considered essential to the continued viability of Amtel-Vredestein as a going concern and, without the transactions, Amtel-Vredestein's debt restructuring can not succeed.”
The publicly traded company borrowed to fund its growth and is about $600 million in debt: “consequently the Amtel-Vredestein Group is highly leveraged, mostly on the Russian side of the business, and currently in a difficult financial position,” according to the statement.
Sibur Holding will acquire 159 million new shares of Amtel-Vredestein valued at about $318.6 million and buy another $50 million worth. It will also provide a $40 million interim funding loan.
Pending shareholders’ approval of the transaction, Sibur Holding will become a 60-70 percent shareholder in Amtel-Vredestein, and Sibur Russian Tires’ chief executive, Vadim Gurinov, will also head Amtel-Vredestein.
Amtel-Vredestein and Sibur Russian Tires, when combined, will become the largest tire maker in Europe and one of the top 10 globally.
—John Crenshaw
