PARIS—Michelin is bidding to buy controlling interest in Societe Internationale de Plantations d'Heveas S.A. (SIPH), a French company with natural rubber plantation holdings in four West African nations.
The nearly $100 million bid, to be carried by Michelin's Cie. Financiere Michelin SCmA subsidiary, is being undertaken in light of the "increasingly important role that West Africa is playing in global natural rubber production against a backdrop of intensified competition between the players in these markets."
To finance the $95.75 per-share bid, Michelin has filed a public tender offer in France to acquire 1.04 million of SIPH's shares not already under its control. Michelin, a shareholder since 2002, holds 23.8 percent of SIPH's shares while an affiliated company, Ivory Coast-based Groupe SIFCA, owns 55.6 percent.
SIFCA, which has interests in palm oil and sugar in addition to NR, describes its relationship with Michelin as a "strategic partnership" that draws on Michelin's "experience and technical expertise" in the field of rubber plantations and NR processing.
The offer price represents a 41.8 percent premium on the last closing SIPH share price on June 5, Michelin said.
Michelin raised its capital shareholding in SIPH in July 2016 to around 24 percent, from 20 percent previously.
SIPH controls NR plantations in Ivory Coast, Ghana, Liberia and Nigeria, which collectively produced roughly 75,000 metric tons of rubber in 2015, the company's figures show. Overall, the company said it sold more than 190,000 tons of rubber in 2015, with purchases from other local sources accounting for the difference. SIPH projects growth over 10 years to 400,000 tons or more.
SIPH reported sales revenue of $311 million in fiscal 2015.