Bridgestone Americas to buy Bandag for $1.05 billion

Nashville, Tennessee - Bridgestone Americas Holding Inc. is set to purchase tyre retreading materials and equipment maker Bandag Inc. in a deal that would be worth about $1050 million (€791 million).

The two firms have entered into a merger agreement where Bridgestone will acquire the outstanding shares of each class of Bandag stock for $50.75 (€38.24) per share in cash.

According to a joint news release issued by both companies, Muscatine, Iowa-based Bandag's board has unanimously approved the agreement, with the transaction expected to close late in the first quarter or early in the second quarter of 2007. It is subject to shareholder and regulatory approvals, as well as the satisfaction of various closing conditions.

The companies said certain shareholders - including Carver Partners LP and Bandag Chairman and CEO Martin Carver - have entered into separate agreements with Bridgestone in which they have agreed, subject to certain conditions, to vote their shares in support of the transaction.

In addition to being a retreading materials supplier, Bandag has a global network of more than 900 franchised dealerships that produce and market retread tyres and provide tyre management services. The company also owns and operates Tire Distribution Systems Inc., a commercial/retail operation that sells and services new and retread tyres and has an 87.5-percent interest in Speedco Inc.

Last year Bandag had worldwide sales of $921 million. Following completion of the transaction, Bandag will operate as a wholly owned subsidiary of Bridgestone Americas Holding, the companies said.

Bandag is smaller in Europe than in the US, generating around 20 percent of sales in the EMEA region. The company operates a mixing and tread manufacture plant in Belgium. A spokesman for Bridgestone said it was too early to say how Bandag's European operations would be integrated with Bridgestone retread acttivities, but that there would certainly be opportunities for synergy in terms of facilties and customer information. “Many of the dealers supply Bandag goods and serices as well as Bridgestone goods and services,” said the spokesman.

"Bandag is a leader in the retreading business, with a strong global reputation for quality, service and technology, as well as an extensive worldwide dealer network," said Mark Emkes, Bridgestone Americas chairman and CEO. "The joining of Bridgestone Americas and Bandag will allow the two companies to better service their customers by offering a comprehensive tyre maintenance solution, backed by a complete line of new and retread truck tyre offerings."

Carver said combining the two firms "will benefit our dealers and enhance their business futures. The transaction combines the strength of two well-run and respected companies, and will allow our dealers to go to market with an even more complete product offering."

Bandag and Bridgestone Americas have a decades-long business relationship, the companies said. TDS stores have been authorized dealers of Bridgestone Americas´ tyres, and GCR Tire Centers - a Bridgestone unit that serves the commercial and off-the-road trucking industry -- are Bandag dealers.

From Rubber & Plastics News (A Crain publication)

Bandag founder's son has mixed emotions about deal Quad-City Times (US - Iowa)

Merger won't affect Carver trust Quad-City Times (US - Iowa)

Bridgestone says to finance Bandag buy with loan Reuters (Japan)