Michelin and Sumitomo create North American tyre distribution JV.
Michelin and Sumitomo are combining their replacement tyre distribution businesses in North America in a new joint venture that the companies say will strengthen their position in the US and Mexico.
The deal between Michelin North America and Sumitomo Corporation of Americas will combine Michelin’s TCi Wholesale and Sumitomo’s TBC Corporation in the joint venture, Michelin said. The agreement values TCi Wholesale at $160 million and TBC at $1.52 billion, and Michelin will contribute a $630 million cash payment to equalize ownership in the joint venture. Operating under the new brand name, NTW, the JV will include TBC’s Mexican wholesale business, TBC de Mexico. Both partners will hold 50% of the new venture upon closing of the deal and each company will appoint three board members to NTW.
Scott Clark, chairman and president of Michelin North America, said: “With this partnership, we can offer an expanded geographic footprint, a broader breadth and depth of product choices and better availability and increased delivery frequency.” Erik Olsen will be CEO of NTW. Prior to the joint venture, Olsen was president and CEO of TBC. TBC will continue to be headquartered in Palm Beach Gardens, Florida. Don Byrd will lead the newly formed NTW wholesale business as president and COO. Prior to his appointment, he was president and COO of Tci.