PRAGUE, Czech Republic (Aug. 27, 2008) — GPX International Tire Corp. said it will sell its Rumaguma A.D. agricultural/industrial tire plant in Ruma, Serbia, and rights to the Galaxy brand in Central and Eastern Europe to CGS Group of Czech Republic.
CGS said it will run the operations under its Mitas A.S. business unit.
Terms of the deal, expected to close before the end of September, were not disclosed. CGS, which controls the Continental brand in agricultural tires, said the acquisition will strengthen its position as the No. 2 agricultural tire maker in Europe.
CGS said it intends to transfer bias-ply capacity from its existing Czech plants to Rumaguma as part of an ongoing radialization project, enabling Mitas to optimize production programs among its plants and continue supplying the still important bias-ply agricultural and industrial tire markets from a cost-effective manufacturing site.
The company eventually will add radial capacity at Rumaguma once the Czech plants are converted.
CGS said it is prepared to continue supplying GPX with selected tires under an off-take agreement for a certain, undisclosed period of time and to explore further possibilities for mutual cooperation in various other fields.