Bridgestone Americas Holding and Bandag announced a merger agreement today, Dec. 5, in which Bridgestone will buy Bandag’s outstanding stock for $50.75 per share in cash, a transaction valued at $1.05 billion.
The Bandag board of directors unanimously approved the agreement. The transaction is expected to close late in the first quarter or early in the second quarter of 2007, after which Bandag will operate as a wholly owned subsidiary of Bridgestone Americas Holding.
Bandag, based in Muscatine, Iowa, has a global network of more than 900 franchised dealers that produce and market retread tires and provide tire management services. Bandag also owns and operates Tire Distribution Systems, which sells and services new and retread tires. Bandag also holds an 87.5 percent interest in Speedco, a provider of on-highway lubrication and tire services to commercial trucks. In 2005, Bandag had worldwide sales of $921 million.
The companies said the joining of the world’s largest tire and rubber company with a premier global brand in retreading would provide customers with total service through the life of a tire.
“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,” said Mark A. Emkes, chairman and chief executive officer of Bridgestone Americas Holding, based in Nashville, Tenn. “The joining of Bridgestone Americas and Bandag will allow the two companies to better service their customers by offering a comprehensive tire maintenance solution, backed by a complete line of new and retread truck tire offerings.”
“The combination of Bridgestone Americas and Bandag will benefit our dealers and enhance their business futures,” said Martin G. Carver, chairman and CEO of Bandag. “The transaction combines the strength of two well-run and respected companies, and will allow our dealers to go to market with an even more complete product offering.”
Bridgestone and Bandag have a decades-long business relationship. TDS stores have been authorized dealers of Bridgestone tires, and many GCR Tire Centers, owned by a Bridgestone subsidiary, are Bandag dealers.
“Bandag’s history of success in the retread market and the similarities in the companies’ business models, distribution networks, customer base and respect for employees make this a perfect fit,” Emkes said.