Wesfarmers Ltd (ASX: WES) announced today that it has agreed to sell its Kmart Tyre and Auto Service (KTAS) business for $350 million to the Germany-based automotive manufacturing company, Continental AG.
Wesfarmers estimates that subject to completion adjustments, pre-tax profits on the sale would be between $270 million and $275 million. The sale is subject to approval by the ACCC and the Foreign Investment Review Board.
There was some speculation that Wesfarmers was looking to offload KTAS, and Bapcor Ltd (ASX: BAP) had been identified as a potential buyer.
Wesfarmers Managing Director Rob Scott however was confident that the decision to sell to Continental was the right move.
He said, "We believe that the divestment is in the best interests of Wesfarmers' shareholders, while giving the employees and customers of KTAS the opportunity to join a highly complementary business in Continental. Continental's automotive industry expertise will further strengthen the business' customer offering".
