Tyre company Michelin has launched a takeover offer for mining and industrial conveyor belt specialists, Fenner.
The proposed deal, which values the target at about £1.3 billion ($2.4 billion), would combine UK-based Fenner’s conveyor expertise with Michelin’s tyre services and solutions.
For Michelin, the acquisition would provide a “perfect strategic alignment” with its ambition to leverage expertise in high-technology materials.
In mining, Michelin believes the acquisition would allow it to provide the industry with a comprehensive offering, ranging from tyres to conveyor belts with related services and solutions, while enhancing the geographical reach of both companies.
A combined entity would also offer broadened high-tech materials expertise and innovation, Michelin said in a statement.
Michelin chief executive Jean-Dominique Senard said mastering high-technology material was key to creating value in the coming years.
“Fenner will enable Michelin to accelerate its growth in this area, and to strengthen its position as a key player in the recovering mining markets with a comprehensive offering,” Senard said.
The boards of both companies have recommended the cash acquisition by Michelin. Under the proposed deal, each Fenner shareholder would receive 610 pence in cash for each share, representing a 30.7 per cent premium to the conveyor company’s closing price on March 16.
Fenner CEO Mark Abrahams commented: “We find the cultural fit and business opportunities excellent with Michelin. Both companies have innovation in their DNA and are customer solution oriented.”