The Michelin Group announced that it intends to acquire Fenner PLC, a manufacturer of conveyor belt solutions and reinforced polymer products for the mining and industrial markets.
Headquartered in Hessle, United Kingdom, Fenner has two divisions: an engineered conveyor solutions division (ECS), which is the second largest producer of heavy conveyor belts and a player in the heavy and complex conveyor belt solution market; and an advanced engineered product (AEP) division, responsible for polymer-engineered products. Fenner identifies, designs and manufactures polymer products for niche markets around the world. Its total annual revenues amounted to £655 million ($9.16 million).
The boards of both companies reached an agreement Tuesday on a cash acquisition by Michelin. Fenner is valued at approximatively £1.3 billion ($1.7 billion) on an enterprise value basis. The acquisition will be implemented by means of a court-sanctioned scheme of arrangement.
“Michelin values the skills, experience and industry knowledge of the Fenner group’s management and employees. Mastering high-technology materials is 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”, said Jean-Dominique Senard, CEO of Michelin. “We find the cultural fit and business opportunities excellent with Michelin. Both companies have innovation in their DNA and are customer solution oriented”, said Mark Abrahams, CEO of Fenner.
For Michelin, the acquisition aligns with its goal to leverage its expertise in high-technology materials. It also offers a comprehensive solution for mining customers allowing the Group to provide mining industry customers with a comprehensive offering, ranging from tires to conveyor belts with related services and solutions, and to enhance both companies’ geographic reach.
The acquisition will also broaden Michelin’s high-tech materials expertise and innovation The addition of Fenner’s polymer portfolio will help Michelin break into the reinforced polymer markets, notably in consumer goods, industrial devices and medical segments, Michelin said in a Nasdaq press release.