HANOVER, Germany—Continental A.G. is acquiring Kmart Tyre & Auto Service, one of Australia's largest tire and auto service suppliers with 258 retail outlets and roughly $300 million in annual sales.
Continental has agreed to pay $255 million to buy the Kmart chain from Wesfarmers Ltd., a widely diversified consumer products and services group that has owned the business since 2007.
Sydney-based KTAS is well represented in Australia's densely populated East and Southeast coastal regions, Continental said. The core business comprises passenger and light commercial vehicle tire sales and service, inspections and maintenance, as well as minor mechanical repairs to brakes, air-conditioning and suspension systems and employs 1,200.
The deal "marks a major expansion in our presence on the Australian tire market," Nikolai Setzer, the member of Conti's executive board responsible for the tire division, said.
"This move is part of our Vision 2025 growth strategy through which we are systematically expanding the worldwide presence of our tire division," Setzer added.
The Kmart business will complement Conti's BestDrive retail network, which operates 61 outlets throughout the country. Conti has been building the BestDrive network since 2011.
KTAS has existed as separate business since 1992, when it was set up as an autonomous division of Kmart Australia. KTAS features Bridgestone, Dunlop, Goodyear, Kumho, Pirelli and Diamondback brand tires. The company claims to be Australia's largest retailer of Goodyear-brand tires and operates a mobile tire-fitting service in the Melbourne and Sydney metro areas.
Started in 1914 as a Western Australian farmers' cooperative, Wesfarmers now is considered one of Australia's largest listed companies, with 2017 sales of $51.8 billion and holdings in supermarkets, liquor, hotels and convenience stores; home improvement; department stores; office supplies; and an industrials division with businesses in chemicals, energy and fertilizers, industrial and safety products, and coal.
Wesfarmers will continue to operate Kmart Australia Ltd., which has 241 stores in Australia and 20 in New Zealand and annual sales of $4.2 billion.