CLERMONT-FERRAND, France—Michelin will complement its product offerings to customers in the mining industry with its planned acquisition of Fenner P.L.C. for about $1.7 billion.
"This acquisition will provide a comprehensive offering to mining customers, which is absolutely key," said Michelin CEO Jean-Dominique Senard in an analyst and investor conference call. "We understand that by combining Michelin's mining tire and Fenner's conveyor belt product and services, we will be better positioned vis-a-vis our major customers in the world."
The acquisition will allow the group to provide mining industry customers with products ranging from tires to conveyor belts with related services and solutions, and enhance both companies' geographic reach, according to a Michelin release.
The overlap in mining customers provides opportunities for efficiency and growth, said Marc Henry, Michelin chief financial officer.
"Our customers are the same. We do sell our products to the same companies. We know them very well, (Fenner) knows them very well," he said. "What is very interesting is that we both have a product offering and a service offering, and all those offerings will combine very nicely. On some geographies, they might be better exposed, in some of those we might be better exposed."
The companies have some overlap in footprint, but the gaps can offer significant potential, he said.
"For example, we are very strong in South America," Henry said. "Fenner is not so strong in South America, so we definitely see a large opportunity there."
The addition of Fenner's polymer portfolio also helps Michelin with offerings in high-tech materials, breaking into the reinforced polymer markets, notably in consumer goods, industrial services and medical segments, according to the release.