Bridgestone to buy retread-tire maker Bandag for $1 billion
December 12, 2006
DES MOINES, Iowa - Tire maker Bridgestone Americas Holding Inc. has agreed to buy Bandag Inc., a maker of retread tires, for $1.05 billion in cash, the companies have announced. Bridgestone Americas, a subsidiary of Japan-based Bridgestone Corp., will pay $50.75 per share for Bandag. The Bandag board of directors approved the sale, which is expected to close by the second quarter of 2007. The deal is subject to regulatory and shareholder approval. The Muscatine, Iowa-based Bandag has a global network of more than 900 franchised dealers that market retread tires and provide tire management services. Following the completion of the deal, Bandag will become a wholly owned subsidiary of Bridgestone Americas. Mark A. Emkes, chairman and CEO of Bridgestone Americas, said Bandag's position as a leader in the retread industry and its reputation for quality service and technology, will mesh well with Bridgestone, the world's largest tire maker. He said Bandag's history of success in the retread market and similarities in the companies' business models, distribution networks, customer base and respect for employees ''make this a perfect fit.'' Last year, Bandag had worldwide sales of $921 million. Bandag also owns tire sales and service chain Tire Distribution Systems Inc., as well as a majority stake in Speedco Inc., a provider of commercial truck lube and tire services. Bandag had reported sales of $921 million in 2005.Of Local Note
In Abilene, Bandag employs about 130 people at its tire retreading plant on Farm Road 18. The facility has been here since 1971. Bandag, it was announced last week, is being purchased by Bridgestone. ''We really can't comment at this point in time on what will happen in the future,'' said Warren Heidbreder, chief financial officer of Bandag in his Iowa office. ''The thing we can say is that we've just been very proud of that facility (in Abilene) and the workforce we have down there. They do a terrific job for us, and we'd even done some expanding down there.'' Heidbreder said the company will know more what will happen in Abilene as merger time gets closer. Richard Burdine, chief executive officer of the Development Corporation of Abilene, said it's too early to know if economic development funds would be offered to retain jobs or expand the plant. The DCOA is supported by a half-cent sales tax. In the past, the DCOA has helped Bandag expand. ''They're not asking for anything at this point, and talk about doing something to keep them here is premature, "Burdine said. ''My hope is that an important part of the merger will be production facilities such as the one here in Abilene. We're waiting like everybody else, but the details will take some time."
