The deal was promoted by Amtel's mother company Amtel Holdings Holland, at a total cost of $289 million, as the bidder also had to pay off Vredestein's debts.
With Vredestein Banden, Amtel expects to produce nearly 22 million tires a year, which according to Amtel CEO Alexei Gurin, "is about half the output of Pirelli and four times as much as that of Nokian."
Last year, Vredestein pulled $30-million net profit, nearly three times that of Amtel, though its sales were three times less.
Gairat Salimov, an analyst with Troika Dialog brokerage, describes the acquisition as a bargain because the Russian company inherited Vredestein's excellent know-how, ready solutions and R&D capabilities at a very attractive price. Amtel has already modernized its production facilities, he says, and is ready, in terms of equipment, to make use of the materials and designs from Vredestein.
Analysts believe Vredestein's popular brand could help Amtel raise its share in a competitive segment now dominated by Michelin, Bridgestone and Nokian. Amtel's economy is large and its development fast enough to make it competitive with any Western tire producer in the midterm.
