Businessman Ion Tiriac, who controls the Tiriac Holdings group,has struck a deal with German Daimler AG group to sell his 49%stake in Mercedes-Benz Romania, a business of almost 400 millioneuros in 2008, market sources say.
The representatives of Mercedes-Benz Romania, the officialimporter of the Mercedes-Benz, smart, Jeep, Chrysler, Dodge andMitsubishi Fuso brands, did not provide any comment. Officials ofTiriac Holdings, which groups all Ion Tiriac's businesses together,did not provide any comment, either.
Ion Tiriac built his automotive empire in Romania, which wasworth 800 million euros in 2008 and comprises importers of Ford,Hyundai, Jaguar, Land Rover and the 40 dealers part of theTiriacAuto, starting with Mercedes Benz, a brand he brought inRomania through Autorom company in 1990. In his first year inbusiness, the company sold 17 cars and spare parts worthapproximately 1,000 dollars. In 1991 it sold 60 cars and 30,000dollar worth of spare parts. The year 2008 was the peak for theMercedes business in Romania, with over 8,800 cars sold.
The exit of Tiriac from the Mercedes-Benz business would be thefirst major transaction on the domestic automotive market since theonset of the crisis.
The auto market is among the worst hit industries in Romaniaafter declines of more than 50% every month this year. The sales ofthe Mercedes-Benz importer have not been immune, either, with thecompany posting a 58% decline for the first ten months of the yearto 3,300 units. Based on these figures, the turnover of theimporter might stand at only 60% of last year's 240 millioneuros.
According to the data on the Finance Ministry's website,Mercedes-Benz Romania ended 2008 with more than 9 million euros inlosses compared with a 13 million-euro net profit in the previousyear.
Consultants on the M&A market say that multiples used in thevaluation of auto industry companies have seen the harshestcorrections this year, as a result of the decline of the market andlimited financing options. As a result, the value of PorscheRomania, whose business stood at one billion euros and net profitreached 70 million euros in 2008, fell by 44% this year to 241million euros, according to the "100 Most Valuable Companies inRomania" Yearbook compiled by ZF in partnership with CapitalPartners investment firm. According to ZF's estimates,Mercedes-Benz Romania might be worth 50 to 80 million euros.
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