Michelin raises stake in Indonesian tire maker

Clermont-Ferrand, France – Michelin has raised its ownership stake in the Indonesian tire company Multistrada Arah Sarana TBK from 87.59% to 99.64%, the French tire maker announced 19 June.

Michelin acquired the 87.59% stake in the publicly-listed Multistrada in March and launched a public offer for the remaining outstanding shares immediately afterwards.

The transaction enabled Michelin to acquire an additional 12.05% of the share capital, bringing the total investment to $545 million (€483 million) for the acquisition.

The acquisition provides Michelin with annual capacity of more than 180 kilotonnes of production and strengthens its presence in the fast-growing Indonesian market.

It also includes a 20% stake in the Indonesian retailer PT Penta Artha Impressi and 123 acres of available land, Michelin reported in March.

Multistrada reported sales of $281 million in fiscal 2017, making it the 62nd largest tire maker worldwide, according to ERJ’s annual global rankings.

The company manufactures 11 million passenger car tires, 9 million two-wheeler tires and 250,000 truck tires per year.

Michelin said the transaction would help it strengthen its presence in the “highly promising but local-production-dominated” Indonesian market.

The group plans convert production gradually to tier 2 Michelin brands, from the company’s existing tier 3 passenger tire brands.

This will allow more tier 1 production at Michelin’s other Asian plants and support growing demand for tier 2 tires in Europe, North America and Asia.

Multistrada will be Michelin’s seventh tire plant in Asia-Pacific, joining those in China (two plants), India and Thailand (three plants).

Michelin also owns a 10% stake in Indonesia’s PT Gajah Tunggal, from which it sources tires.