Germany’s Continental is to purchase Australia’s Kmart Tyre and Auto Service (KTAS) from its current owner, Wesfarmers Limited, for A$350 million. KTAS has around 258 outlets employing more than 1,200 staff in the country.
The core business of KTAS comprises passenger and light commercial vehicle tyre sales and service, inspections and maintenance, as well as minor mechanical repairs to brakes, air-conditioning and suspension systems. KTAS features Bridgestone, Dunlop, Goodyear, Kumho, Pirelli and Diamondback brand tyres. The company claims to be Australia’s largest retailer of Goodyear-brand tyres and operates a mobile tyre-fitting service in the Melbourne and Sydney metro areas.
To date, Continental has been represented in Australia through its Best Drive and Continental branded retail network.
Nikolai Setzer, member of the Executive Board of Continental responsible for the Tyre division, said: “The acquisition of KTAS marks a major expansion in our presence on the Australian tyre market. This move is part of our ‘Vision 2025’ growth strategy through which we are systematically expanding the worldwide presence of our Tyre division.”
The deal is part of a series of divestment for Wesfarmers, Australia’s largest private employer whose assets include supermarket chain Coles.
Continental, which employs employs more than 243,000 people in 60 countries, will use the Kmart Tyre & Auto Service name and logo for a transitional period following the sale.
Wesfarmers Managing Director Rob Scott says the agreement crystallises value from the business turnaround since it was acquired as part of the Coles Group in 2007.
“We believe that the divestment is in the best interests of Wesfarmers’ shareholders, while giving the employees and customers of KTAS the opportunity to join a highly complementary business in Continental,” he says.
“Continental’s automotive industry expertise will further strengthen the business’ customer offering.
The deal, subject to certain approvals from the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board, is expected to be complete in the first quarter of the 2019 financial year.