May 09, 2024

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[THE INVESTOR] Hankook Tire on Feb. 3 confirmed it has no plans to change the leadership of JAX Tyres after its acquisition of Australia’s largest tire franchise operator.

“JAX Tyres will keep its management team, including CEO Jeff Board, and continue to operate under its brand in Australia,” a Hankook Tire official told The Investor. “There will be no immediate change to JAX Tyres’ operations or distribution channels as a result of the acquisition.”

On Feb. 1, Hankook Tire announced it took over 100 percent stake in JAX Tyres for an undisclosed sum. The deal value, however, is within the range that could be covered by Hankook Tire’s asset size, according to the firm.

The latest deal is considered a win-win deal for both parties, Hankook Tire said. The Korean tire maker plans to leverage JAX Tyres’ strong online and off-line franchise platform to expand its business-to-consumer model, one of its new business focus, while the Australian retailer seeks to gain a global network under Hankook Tire’s portfolio.

“We will solidify our position as the global top-tier brand by extending the role of the holding company,” said Suh Seung-hwa, vice chairman & CEO of Hankook Tire, in a statement immediate after the deal announcement. “We will concentrate more on enhancing global competitiveness by diversifying the inorganic business in the automotive sector based on organic growth of tire.”

“This deal, combining Hankook Tire’s global position and the JAX business system is a timely opportunity given the market’s noticeable trend to vertical slimming and integration stimulated by the power of online and B2B and B2C opportunities,” JAX Tyres CEO Jeff Board said.

“We look forward to realizing significant opportunities afforded by this deal, both in Australia and elsewhere.”

Hankook Tire, however, said there is no immediate plan for JAX Tyres to expand its franchise outside Australia.

JAX Tyres, established in 1949 in Sydney, runs 83 outlets across Australia and stock a range of tire brands, including BFGoodrich, Bridgestone, Continental, Hankook, Goodyear and Michelin.

Meanwhile, South Korea’s largest tire maker Hankook Tire said it reported 239.7 billion won (US$209.10 million) in operating profit in the fourth quarter last year, up 0.3 percent from a year ago. Revenue gained 1.2 percent to 1.61 trillion won in the cited period.

As for all of 2016, Hankook Tire posted a 1.10 trillion won in operating profit, up 24.7 percent, on the back of increased original equipment tire demand in its major markets, including Europe, the US and China. The annual revenue stood at 6.62 trillion won, up 3.1 percent.

By Ahn Sung-mi (sahn@heraldcorp.com)