Itochu May Buy UK's Kwik Fit for $1 Billion

Japanese trading house Itochu plans to buy Britain's top tyre seller Kwik Fit from European fund PAI partners for about 85 billion yen ($1.04 billion), a company source said on Thursday.

2010 Paris Motor Show - Press Day
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2010 Paris Motor Show - Press Day

The deal underscores a push by Itochu to focus more on businesses that are more directly linked to consumers as a means to hedge against volatility in the resources markets, its traditional stronghold.

Itochu acquired Britain's Stapleton's Tyre Services Ltd in 1993. The Kwik Fit acquisition would give it an additional 1,400 automotive service shops in Europe, the Nikkei business daily said earlier on Thursday.

Itochu has reached a basic agreement to purchase 100 percent of Kwik Fit shares from PAI partners, and a deal could be signed as early as in April, the newspaper added.

Kwik Fit's sales rose 6.2 percent to 485.5 million pounds and earnings before interest, tax, depreciation and amortisation (EBITDA) rose 9.4 percent to 51.3 million pounds in the first half of last year.

Itochu's shares rose 1.1 percent to 849 yen while the benchmark Nikkei 225 advanced 0.4 percent.