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Home » News » Michelin and Sumitomo Corporation to Create Second-Largest Wholesale Player in the US and Mexico
09.01.2018

Michelin and Sumitomo Corporation to Create Second-Largest Wholesale Player in the US and Mexico

Michelin and Sumitomo Corporation to Create Second-Largest Wholesale Player in the US and Mexico

Sumitomo Corporation of Americas (100% owned subsidiary of Sumitomo Corporation ; hereinafter “SCOA”) and Michelin North America Inc. (hereinafter ”MNAI”) announced a definitive agreement to combine their respective North American replacement tire distribution and related service operations in a 50-50 joint venture, forming the second-largest player in the wholesale tire market in the United States.

The combined wholesale unit will operate under a new brand, NTW, and will be one of the operating companies of TBC Corporation. This new company will provide better availability of tire products at all price points across North America, achieving greater scale in wholesale delivery for customers. The JV also will enable the two companies to enhance service quality, capacity and speed for customers.

The partnership will bring together MNAI’s TCi, the fourth largest wholesale tire and service network in the United States, with more than 85 locations across the U.S., with SCOA’s TBC, one of the nation's largest vertically integrated marketers of tires for the automotive replacement market, with 59 wholesale distribution centers and more than 2,400 North American retail locations.

Through the joint venture, two profitable companies – TCi Wholesale and TBC – will be combined. Based upon the enterprise value of each business ($160m for TCi Wholesale and $1,520m for TBC), Michelin would contribute a cash payment of $630 million to SCOA and TCi Wholesale to equalize ownership in the JV.

The transaction is subject to customary approvals.

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