Dec 10 2006
Bridgestone Corporation announced today that Bridgestone Americas Holding, Inc. ("BSAH"), the U.S. subsidiary of the Bridgestone Corporation, and Bandag, Incorporated ("Bandag") have entered into a merger agreement pursuant to which BSAH will acquire the outstanding shares of each class of stock of Bandag for US$50.75 per share in cash. The transaction is valued at US$1.05 billion.
The Board of Directors of Bandag has unanimously approved the agreement. The transaction is expected to be completed late in the first quarter or early in the second quarter of 2007, subject to the receipt of shareholder and regulatory approvals, as well as the satisfaction of other customary closing conditions.
Bandag is a leading manufacturer of tire retreading materials and equipment. Based in Muscatine, Iowa, United States, Bandag has a global network of more than 900 franchised dealers in over 90 countries that produce and market retread tires and provide tire management services. Currently, it also operates 10 plants, with locations in the United States, Belgium, Brazil and Mexico. In addition, Bandag owns and operates Tire Distribution Systems, Inc. (TDS), a commercial retail operation which sells and services new and retread tires, and holds an 87.5% interest in Speedco, Inc., a provider of on-highway lubrication and routine tire services to commercial truck owner-operators and fleets. In 2005 Bandag had worldwide sales of US$921 million. Following completion of the transaction, Bandag will operate as a wholly owned subsidiary of BSAH.
"Retreading" is widely used for truck and bus, aircraft, construction and off-highway tires. When the original tread has been worn, the remaining tread is buffed away and a new layer of tread is applied, continuing the lifecycle of the tire. The "tread" is a part of the tire that touches the road. The retread business is well established in the United States and European markets, and is becoming more attractive to fleet operators in emerging markets such as Asia and Latin America. Retreading enables customers to get the full value of a new tire by reusing the tire's casing again and again. As such, it is an integral part of a successful total tire management system.
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. The Bridgestone Group is the world's largest manufacturer of quality tires and other rubber products. Through shared resources of tire and retread technologies, the end user will have the benefit of better products and services. Finally, expanding the retread business through the combination of the Bridgestone Group and Bandag can lead to a more effective utilization of natural resources and minimize the number of tires that might be prematurely taken out of service, all of which contributes to the well-being of our environment.