Tatneft acquires Uzbek tire maker Birinchi

Samarkand, Uzbekistan – Russian energy and petrochemicals group Tatneft has acquired 100% share of Uzbek tire manufacturer Birinchi Rezinotexnika Zavodi LLC for an enterprise value of $80 million (€75 million), it has been announced.

Based on the agreement, which was closed 20 Jan, Tatneft is required to further invest in the production of new types of rubber engineering products at the plant after the acquisition.

The deal also carries over Birinchi’s $153 million worth of credit obligations and debts, according to former major shareholder Uzkimyosanoat.

Located in Angren, in eastern Uzbekistan, Birinchi’s manufacturing plant has the capacity to produce 3 million units of BARS-branded passenger car tires, 200,000 units of agricultural tires and 100,000 p/m of conveyor belts.

Prior to the transaction, 91.8% of Birinchi’s shares were held by Uzkimyosanoat, "an integral corporate structure uniting chemical enterprises of the Republic of Uzbekistan."

The remaining 8.2% belonged to Uzkimyoimpeks, a local chemicals company.

The deal coincides with Tatneft’s ongoing €400-million bid to acquire Nokian Tyres’ Russian assets, which according to the Finnish tire maker is still pending approvals by relevant authorities.

In addition to that Tatneft is also building a joint-venture tire plant in Saran, Kazakhstan, which is set for production soon.

Tatneft’s moves to invest in these tire & rubber businesses follows its decision in May last year to sell its Russia-based tire operations to JSC Tatneftekhiminvest-Holding, which it stressed is not part of the Tatneft Group.

At the time, the group said the sale of the tire business would allow it “to concentrate on key strategic projects.”