Wesfarmers Ltd (ASX: WES) has announced that it is selling Kmart Tyre And Auto for $350 million to Continental AG.
Kmart Tyre And Auto has 258 stores across Australia with over 1,200 employees and also employs the most apprentice motor mechanics in the country. Continental generated revenue of €44 billion last year and employs 243,000 people in 60 countries.
The sale price of $350 million means that when completed Wesfarmers will report a pre-tax profit of $270 million to $275 million. However, the deal will need to be approved by the ACCC and FIRB.
Wesfarmers Managing Director Rob Scott said “We believe that the divestment is in the best interests of Wesfarmers’ shareholders, whilst giving the employees and customers of KTAS the opportunity to joint a highly complementary business in Continental.”
This sale finalises an auction process that auto parts business Bapcor Ltd (ASX: BAP) was also a part of, according to media speculation.
Wesfarmers thinks the sale will be completed by the end of September 2018.
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