Home Tire Market & Tire Company news Michelin buying control of Indonesia’s P.T. Multistrada

Michelin buying control of Indonesia’s P.T. Multistrada


CLERMONT-FERRAND, — Group Michelin is buying 80-percent control of ’s P.T. Multistrada Ara Sarana Tbk., producer and marketer of the Achilles and Corsa brands as well as a number of private brands.

Michelin buying control of Indonesia's P.T. Multistrada

Michelin said it will pay $439 million for the 80-percent share of Multistrada shares held by an group, subject to certain closing adjustments, and will launch a public offer thereafter for the remaining outstanding shares at the same price it’s offering the group.

Multistrada reported sales of $281 million in fiscal 2017, making it the 62nd largest maker worldwide, according to Tire Business‘ annual Global Top 75 ranking. The 25-year-old company operates an annual production capacity of more than 180,000 metric tons, or 11 million passenger car , 9 million two-wheeler and 250,000 truck .

Michelin said this transaction will help it strengthen its presence in the “highly promising but local-production-dominated” Indonesian market by obtaining a competitive local plant with quality facilities and immediately available production capacity.

Michelin said it will convert production gradually to Tier 2 Michelin Group brands from the company’s existing Tier 3 passenger tire brands, thereby allowing more Tier 1 production at its other Asian plants and supporting growth of demand of Tier 2 volumes in , North America and .

The acquisition will be funded from internal financial resources and is not expected to have an impact on Michelin’s ratings

The transaction also will provide Michelin with a 20-percent ownership stake in the Indonesian tire retailer P.T. Penta Artha Impressi in partnership with IndomobilGroup and private investors. This will boost the marketing and sales of Michelin Group brands in Indonesia, Michelin said, allowing it to secure “significant access” to a major market and be well placed to benefit from the market’s growth and expansion.

“The acquisition of Multistrada represents an excellent opportunity for Michelin to expand its operations in Indonesia, the most populous country in Southeast Asia, and immediately gain competitive, good-quality production capacity without having to create any new manufacturing facilities,” Michelin CEO Jean-Dominique Senard said.

Multistrada CEO Pieter Tanuri added: “We are very proud of what we achieved with Multistrada, and we are confident Michelin is the ideal partner to take Multistrada forward into a new era of growth and success for the benefit of all stakeholders and employees.”

Michelin said the deal presents potential synergies in manufacturing, sales and purchasing of up to $70 million per year within three years of the acquisition. Multistrada, including the stake in the P.T. Penta and 123 acres of available land, carries an enterprise value of $700 million, representing 6.3 times EBITDA for the 12 months ended Sept. 30th, 2018, after expected synergies.

This will be Michelin’s seventh tire plant in Asia/Pacific. Its others are in China (two plants), and (three plants); it also owns a 10-percent stake in Indonesia’s P.T. Gajah Tunggal, from which it sources tires.

Multistrada was founded as P.T. Oroban Perkasa in 1988 and initially used technology purchased from Pirelli Tyre and later from Continental A.G. Majority control was purchased in 2004 by a pair of local investors, PVP XVIII Pte. Ltd. and P.T. Indokemika Jayatama, which then took the company public.

Multistrada is represented in the U.S. by Achilles Tire USA Inc. of Irvine, Calif.



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