Kmart Tyre brand to disappear
WESFARMERS has agreed to sell its Kmart Tyre and Auto Service business to German auto giant Continental AG for $350 million.
Kmart Tyre and Auto Service is one of the country's largest auto service businesses with 258 stores and more than 1200 employees. It is also the single largest employer of apprentice motor mechanics in Australia.
Wesfarmers has owned the chain since it acquired the Coles Group in 2007. The conglomerate said the agreement to sell "crystallises value for shareholders from the business turnaround".
"We believe that the divestment is in the best interests of Wesfarmers' shareholders, while giving the employees and customers of KTAS the opportunity to join a highly complementary business in Continental," Wesfarmers managing director Rob Scott said in a statement on Monday.
Continental employs more than 243,000 people in 60 countries and has annual sales of $69 billion across its five business divisions. "Continental's automotive industry expertise will further strengthen the business' customer offering," Mr Scott said.
"I thank all of the KTAS team for their outstanding efforts in growing and improving the business under Wesfarmers' ownership and, in advance, for their continued focus and commitment during the transition to new ownership."
Wesfarmers said the transaction, which is subject to approvals by the Australian Competition and Consumer Commission and the Foreign Investment Review Board, would return a pre-tax profit of $270 million to $275 million.
Subject to approvals, the sale is expected to complete in the first quarter of the 2019 financial year. Wesfarmers reports its full-year results on Wednesday.