Michelin to purchase historic Hessle firm Fenner for £1.3bn
Mark Abrahams, chief executive officer of Fenner PLC at the Fenner offices at Hesslewood Country Office Park
By Hull Daily Mail | Posted: 20 Mar 2018
An agreement has been reached for historic Hessle engineering firm Fenner Plc to be purchased by French tyre giant Michelin in a deal worth around £1.3 billion.
The global tyre manufacturer has valued the East Yorkshire firm at around £1.2 billion and has also agreed to purchase Fenner’s net debt of £102 million.
The belt manufacturing business, based at Hesslewood Office Park, employs roughly 5,000 staff in 20 countries across the world. Fenner recorded a revenue for the year ending August 2017 of £655m and was founded in Hull in 1861.
The majority of the Hessle company's workforce may now be based overseas, but it still has a facility in Marfleet Avenue, east Hull, where conveyor belts are made for the mining industry.
The firms have agreed terms on a recommended cash acquisition, with shareholders set to receive 610 pence per share, offering a premium of 30.7 per cent to Fenner's closing share price on March 16.
The board of directors at Fenner say they find the terms of the deal to be “fair and reasonable”.
Michelin says the acquisition strengthens its engineering capabilities and will help it to increase clients through the combined offering of the two businesses.
Vanda Murray OBE, chair of Fenner said: "Fenner has successfully established itself as a world leader in reinforced polymer technology and the board remains confident that Fenner's existing strategy would deliver significant value for Fenner Shareholders as an independent company.
“However, we also believe that the terms of the Acquisition acknowledge the quality of Fenner's businesses and the strength of its future prospects, and as such the Board intends to recommend unanimously the Acquisition to Fenner Shareholders."
Exterior of Fenner Dunlop, Marfleet Lane, east Hull
Commenting on the announcement, Mark Abrahams, chief executive officer of Fenner said: "We find the cultural fit and business opportunities excellent with Michelin. Both companies have innovation in their DNA and are customer solution oriented."
Jean-Dominique Senard, chief executive officer and managing general partner of Michelin said: "Michelin values the skills, experience and industry knowledge of Fenner's management and employees.
“Mastering high-technology materials is key to creating value in the coming years. The acquisition will enable Michelin to accelerate its growth in this area, and to strengthen its position as a key player in the recovering mining markets with a comprehensive offering."
Following completion of the deal, Fenner will de-list from the London Stock Exchange and re-register as a private company.
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