HELSINKI - Winter tire specialist Nokian Renkaat said on Monday that Japan's largest tire maker, Bridgestone, had agreed to purchase a minority stake in the Finnish company to widen its market reach and know-how.
Bridgestone said it had no current plans to raise or lower the stake of 18.9 percent, or two million Nokian Renkaat shares, it agreed to buy for 78.34 million euros ($84.9 million) from Finnish mobile phone maker Nokia.
"At this point, it is a business investment. We see a lot of potential synergies and we want to build on those," Bridgestone Europe Vice President Des Collins told Reuters by telephone.
"We see that Nokian Renkaat is a specialist in a niche area. They are particularly strong in the Nordic area...and in winter tires," he said.
Bridgestone's European subsidiary agreed to buy the Nokian Renkaat shares -- the whole of Nokia's stake -- for 39.17 euros per share, becoming the biggest shareholder in the Nordic region's largest tire maker.
Nokian Renkaat already distributes Bridgestone and other tires in the Nordic region via its retail chain Vianor.
Bridgestone saw rising profits in 2002 on the back of good exports after it was battered for two years by the fallout from deadly accidents involving its U.S. unit's Firestone tires.
The Japanese company is battling rivals Goodyear and Michelin for supremacy in the global tire market.
Analysts said Nokian Renkaat, one of the most profitable firms in the sector due to its focus on high-end winter tires, was an attractive takeover target for Bridgestone in the longer term.
Nokian's joint venture with Russian tire maker Amtel, signed in December, is expected to cement its market position in Russia and the former Soviet Union countries, where Nokian Renkaat already is the leading tire importer with 14 percent of the market.
Mandatum Stockbrokers analyst Ari Laakso, who has a "buy" rating for the stock, said the move gave Bridgestone a chance to improve its weak market position in Europe and Russia.
Nokian Renkaat Chief Executive Kim Gran told Reuters he would be interested in cooperation with Bridgestone on areas such as outsourcing of production and research and development.
"I don't see it as a hostile bid...We are operating as an independent company and glad to do so in the future as well," said Gran, but added any bid for the firm would be considered.
With 2002 net sales of some 480 million euros, the Finnish company has set a narrow focus on winter and special machinery tires with high profit margins, where it wants to become global player, helped by fast growth in Eastern Europe and Russia.