CONTINENTAL ACQUIRES KMART TYRE & AUTO SERVICE
The business will eventually trade under a new name
International automotive supplier, tyre manufacturer and technology company, Continental AG, has purchased the Kmart Tyre & Auto Service (KTAS) business from Wesfarmers for A$350 million.
The sale is subject to regulatory approval from the Foreign Investment Review Board and Australian Competition and Consumer Commission, however the company expects the deal to be completed next month.
Continental says the acquisition will allow the company to grow its tyre sales network in a market it views as highly promising.
“The acquisition of KTAS marks a major expansion in our presence on the Australian tyre market,” Continental’s Executive Board member responsible for the tyre division, Nikolai Setzer, said.
“This move is part of our ‘Vision 2025’ growth strategy, through which we are systematically expanding the worldwide presence of our tyre division.”
KTAS managing director, Adam Pay, will continue to head the business.
“It’s an exciting time,” Adam said.
“Continental is a complimentary business and a global auto player, so we are delighted with the sale.”
Adam said the change would allow KTAS to enter a new period of expansion.
“The business still has the opportunity to grow under the new ownership,” Adam said.
“Wesfarmers has been a great owner, the trust they placed in us, the autonomy they have given us, and the access to capital for growth, has been terrific.
“Fitting in with a company’s core strategy is very important and there are great opportunities in being owned by Continental, which is already a significant player in auto.”
The business will eventually trade under a new name but that won’t be decided upon for some time.
“We have got 12 to 15 months to figure that out,” Adam said.
“There is a transitional services agreement between the two companies giving the Kmart Tyre and Auto business time to address some of the operational changes including the name.
“It’s not something you can flick the switch on and do overnight. There is a period where the business will continue to use the Kmart name and eventually transition to something new.”
Adam said previous research indicated customers will be unaffected by the rebranding.
“Kmart is a good, strong brand, but our research has revealed that if we stay in our great locations, continue to offer great service and communicate clearly about why we are doing it, the customers will remain with us,” Adam said.
For more information about Continental, visit www.continental-reifen.de