France's Michelin set to buy Flex Composite Group for €700 mn

The agreement would enable Michelin and FCG to create a leader in high-tech engineered fabrics and films. The acquisition is in perfect alignment with Michelin in Motion 2030 strategy. This will mark a significant step forward in Michelin’s strategy of growing its polymer composite activities in adjacent areas, leveraging unrivalled innovation and R&D capabilities, and benefiting from FCG’s advanced customers intimacy and industrial process expertise, Michelin and FCG said in a joint press release.

The transaction would unlock deep innovation synergies in a broad range of products and applications, while further improving the environmental footprint of FCG.

FCG is a European leader in engineered fabrics and films with applications in highly technical markets such as marine, supercars and electric vehicles, sports, and construction. FCG masters a wide range of polymer composite solutions, adjacent to those already developed by Michelin. The company has 400 employees. FCG primarily operates in Europe, in fast-growing markets with strong demand dynamics catering to high-end customers. In 2022 FCG reported €202 million revenue. Over the 2015-2022 period, it delivered an average organic growth of 11 per cent, with 25-30 per cent EBITDA margin.

FCG acquisition would grow Michelin’s High-Tech Materials revenue by c.20 per cent and accelerate the growth profile of this business. The transaction would be EBIT margin-accretive for Michelin at Group level and for the Specialty segment it will belong to, with positive cash generation and EPS impact.

Florent Menegaux, CEO of Michelin, said: “We are very pleased to extend a warm welcome to the FCG teams into our Group, to create a recognised leader in high-tech technical fabrics and films. This operation draws on the best of both companies, in particular on our shared expertise in polymer composite solutions. We are aiming to generate synergies and to push back the frontiers of deep-tech innovation in a wide range of new products and applications. This acquisition is a milestone in our strategy to position the Group as a key player in polymer composite solutions beyond mobility.”

Emmanuel Capriglione, general manager of FCG, said: “FCG has enjoyed very substantial growth in its business in the last years. This success is due to a number of key factors: recognised expertise in composite materials and films, a capacity for innovation and a strong desire to constantly improve the service provided to its customers. With Michelin, FCG will be able to increase its capacity for innovation, its actions to reduce its environmental footprint, and to provide its customers with more sustainable materials.”

Fibre2Fashion News Desk (NB)