Amtel-Vredestein agrees to buy Russian auto parts distributor

Moscow - Amtel-Vredestein's retail unit, AV-TO, has agreed to buy Russian auto parts distributor LLC Trade House Pigma.

Pigma, based in Nizhny Novgorod, is in the process of acquiring Russian tyre wholesale distributor LLC Trade House Megashina.

This transaction will be completed before the Amtel-Vredestein takeover.

The tyre manufacturer said the merger of AV-TO and Pigma/Megashina would produce combined sales of approximately of $250 million (€194.7 million).

Amtel-Vredestein hopes that the deal will cement the company's position as Russia's top tyre distributor and retailer, as well as manufacturer.

''By combing these complementary businesses and experienced, hands-on executives into one group we have constructed a more robust, more dynamic, more self-sufficient company capable to develop both its wholesale and retail operations,'' Amtel-Vredestein chief executive Alexei Gurin said.

Pigma's top directors Mikhail Pigaev and Nikoli Makarov will remain with the company.

''By joining forces with an industry leader, we will be able to accelerate our plans to expand and enhance our business,'' Pigaev said.

''And we, in turn, can use our experience to assist Amtel-Vredestein in the further development of its distribution and retail network.''

Pigma sells more than 27000 automotive components from about 40 producers to more than 1500 customers in Russia and the Commonwealth of Independent States.

The 10-year-old company also built seven tyre service outlets in Nizhny Novgorod, which it sold to Amtel-Vredestein in March.

Megashina serves more than 500 customers, including tyre retailers, car dealers and service stations, and operated 14 offices and warehouses.