Dunlop take-over to be competitive boost

Press, 4 October 1984, Page 26

Dunlop take-over to be competitive boost

PA Wellington Dunlop. Olympic of Australia, will spend at least $lO million on modernising its New Zealand manufacturing facilities during the next five years, the company said yesterday. Its managing director, Mr John Gough, said most of the money would be invested in bringing the tyre production capability of Dunlop New Zealand up to internationally competitive standards.

Dunlop Olympic last week agreed to purchase Dunlop Holdings pic (UK)’s 51.7 per cent shareholding in Dunlop New Zealand, and on Monday announced it would make an offer for the remaining 48.3 per cent held by New Zealand shareholders. The purchase and the offer are both still subject to Government approval. Mr Gough said the New Zealand plants of CANZAC Cables, acquired by Dunlop

Olympic two weeks ago, and Holeproof Industries, its New Zealand clothing and textile subsidiary, would also be upgraded as part of the capital expenditure programme.

With Dunlop New Zealand, the total New Zealand operations of Dunlop Olympic will employ over 21,000 people. Sales will be approximately $2OO million. Mr Gough said one immediate result of Dunlop Olympic’s move into New Zealand would be that this country would gain a more efficient tyre industry, the integration of Dunlop New Zealand tyre operations with the Australian operations leading to significant improvements in production and marketing.

“Consumers will be the ones to benefit, but so will the industry itself as it acquires the extra efficiency to live in an increasingly competitive environment,” Mr Gough said.

Production of some types of tyre would be transferred from Australia to New Zea-

land. The Dunlop New Zealand tyre product range would also be rationalised to improve competitiveness and efficiency. Dunlop Olympic’s application for the 48.3 per cent minority shareholding in Dunlop New Zealand was lodged with the Overseas Investment Commission in Wellington on Tuesday.

The offer is for $4.64 cash per share for each Dunlop New Zealand ordinary share. Alternatively Dunlop Olympic is offering shareholders either one Dunlop Olympic ordinary share plus $1.90 cash for each Dunldp New Zealand ordinary share, or seven Dunlop Olympic ordinary shares plus 10c for every four Dunlop New Zealand ordinary shares.