- Integrated services provider Downer (DOW) has taken another step under its Urban Services strategy with the $79 million sale of Otraco to Bridgestone
- The sale is part of the company’s decision to exit the capital-intensive mining sector and focus on more core industries like transport and utilities
- The completion of the sale, which remains subject to regulatory approval, is expected to occur before the end of this year
- So far, the proceeds from the sale of Downer’s businesses amounts to $605 million, of which $476 million has already been received
- Downer is up 1.48 per cent to $5.47 per share
Integrated services provider Downer (DOW) has taken another step under its Urban Services strategy with the $79 million sale of Otraco to Bridgestone.
The sale of the tyre management business is part of the company’s decision to exit the capital-intensive mining sector and focus on more core industries like transport and utilities.
Downer says these sectors have shown greater strength and resilience in a difficult climate, and have attractive medium and long-term growth opportunities.
However, the move is in stark contrast to Tokyo-listed Bridgestone’s ambitions, which said it would use the acquisition to “accelerate the growth of Bridgestone’s global mining solutions business and expand the company’s service network in key markets such as Australia, Chile and South Africa.”
“Otraco has an extensive service network built on strong customer relationships and we are excited for their team of experts to join Bridgestone,” said Masahiro Higashi, Bridgestone’s Global COO and Representative Executive Officer.
The completion of the sale, which remains subject to regulatory approval, is expected to occur before the end of this year.
It follows the recent sale of a 70 per cent interest in its Laundries business to an entity established by private equity firm Adamantem Capital.
So far, the proceeds from the sale of Downer’s businesses amounts to $605 million, of which $476 million has already been received.
“The sale of Otraco follows Downer’s exit from its Underground mining, Open Cut Mining West, Downer Blasting Services and Snowden consulting businesses and also our share in the RTL Mining and Earthworks joint venture,” said Grant Fenn, CEO of Downer.
“We remain in active discussions with a number of interested parties in relation to the Open Cut Mining East business.”
Downer is up 1.48 per cent to $5.47 per share at 1:35 pm AEST.