Bridgestone to buy retread tire maker Bandag for $1B

Tire maker Bridgestone Americas Holding Inc. has agreed to buy Bandag Inc., a maker of retread tires, for $1.05 billion in cash, the companies announced Tuesday.

Bridgestone Americas, a Nashville, Tenn.-based subsidiary of Japan-based Bridgestone Corp., will pay $50.75 per share for Bandag, a 13 percent premium to the company’s closing stock price on Monday.

The Bandag board of directors approved the sale, which is expected to close by the second quarter of 2007. The deal is subject to regulatory and shareholder approval.

The Muscatine, Iowa-based Bandag has a global network of more than 900 franchised dealers that market retread tires and provide tire management services. Following the completion of the deal, Bandag will become a wholly owned subsidiary of Bridgestone Americas.

Mark A. Emkes, chairman and CEO of Bridgestone Americas, said Bandag’s position as a leader in the retread industry and its reputation for quality service and technology, will mesh well with Bridgestone, the world’s largest tire maker.

“The joining of Bridgestone Americas and Bandag will allow the two companies to better serve their customers by offering a comprehensive tire maintenance solution, backed by a complete line of new and retread truck tire offerings,” Emkes said.

He said Bandag’s history of success in the retread market and similarities in the companies’ business models, distribution networks, customer base and respect for employees “make this a perfect fit.”

Martin G. Carver, Bandag’s chairman and CEO, said the venture “will benefit our dealers and enhance their business futures … and will allow our dealers to go to market with an even more complete product offering.”

Christine Karbowiak, a Bridgestone Americas spokeswoman, said the company has received an increasing number of customer requests for retread services with their new tires.

“This is going to help our customers get full value for the tire by using the casing again and again,” Karbowiak said.

She doesn’t foresee any of the 300 jobs at Bandag’s Iowa corporate headquarters, equipment manufacturing plant and research and development center being cut or moved.