Ford Motor yesterday initiated a £1 billion sterling (€1.49 billion) agreed cash takeover bid for Kwik-Fit, the Scottish tyres and exhaust business, as part of the US car and truck maker's ambition to become a global leader in automotive services as well as in vehicles.
The strategy sets Ford apart from most of its rivals, which have been selling parts and related businesses to focus on vehicle development and production. "The acquisition of Kwik-Fit is an important step towards Ford's goal to become the world's leading consumer company that provides automotive products and services," said Mr Jacques Nasser, Ford's chief executive and chairman.
Ford plans to tap all sectors of the vehicle after-sales market - including servicing, repairs, replacement parts and insurance. Sir Tom Farmer, executive chairman and founder of Kwik-Fit, will stay on in charge of his group, which will operate as a division of Ford, and will step up its European expansion plans and consider moving into Asia and Latin America.
Ford's offer of 560p a share is a premium of 32.9 per cent over Kwik-Fit's closing share price on Friday. Kwik-Fit shares rose 1191/2 p to 541p yesterday.
Sir Tom (58) started the business in 1971, 15 years after leaving school at the age of 14 to work as a store boy in a tyre business. He stands to make more than £78 million from his shareholding in the group.
Apart from its UK exhausts, tyres and brakes business, KwikFit boasts an insurance sales business started in 1995 and a growing European business after a £105 million French acquisition last year.
Mr Ian McAllister, chairman of Ford in Britain, said the acquisition would give Ford access to a large market from which it and its franchised vehicle dealers had largely been excluded.
When combined with Ford's own Rapid-Fit operations the expanded operations would cover most of the after-sales market, according to Mr McAllister.
Mr Nasser has set twin targets for Ford of a 5 per cent return on sales and 7 per cent annual growth by involving the company in every aspect of automotive goods and services.
