MAG, Continental talks on tyre plant sale stutter
Dubai, September 30, 2009
Syrian-owned MAG group said on Wednesday it plans to start due diligence to buy a French tyre factory as soon as possible, despite wranglings over the letter of intent with Germany's Continental.
MAG, a Dubai-based industrial and property group owned by Syrian businessman Moafaq al-Gaddah, said in June it intended to acquire the strike-hit factory at Clairoix, France.
"We sent yesterday (Tuesday) an amended version of the letter of intent and are awaiting their response," MAG vice-chairman for strategy and finance Fawaz Sabri told Reuters. "We have put everything down and all our concerns," he said.
MAG has been holding talks with Germany-based Continental since May about the plant, which has been at the centre of a high-profile industrial dispute.
Continental said in March it would close the plant, as well as a site in Hanover, due to the global economic downturn. Clairoix workers have staged a series of protests to fight the closure, which would eliminate 1,120 jobs. They have hurled insults and eggs at managers, burnt tyres on the streets of Paris and trashed two buildings.
Alexander Luehrs, a Continental spokesman said: "Negotiations were ongoing, but (there was) no solution yet." Major points of disagreement included price and technology transfer, Luehrs said.
He was quoted by Abu Dhabi newspaper The National earlier on Wednesday as saying it was not easy to just sell the plant with machines and technology that could make MAG a direct competitor.
"It has taken us a long time to arrive where we are," he said. "MAG has no experience in producing tyres, so they need the basic know-how. Of course we won't sell our most precious asset."
Sabri said MAG had concerns over fixing a price before due diligence was completed and could not accept responsibility over the plant's environmental issues prior to assessing the factory.
"MAG hopes to get started, as soon as practicable, with a thorough process of information-gathering about the plant and its resources, with a view to negotiating a mutually fair acquisition deal," it said in a separate statement.
Sabri told Reuters in June the group, which currently supplies tyres, had been in the market to buy a manufacturer for about 15 years to gain the technological expertise to make tyres, but the previously booming auto industry had meant that there was little to buy.-Reuters