It seems a brand new deal described by Simpson Motors as a “business combination” is more of a takeover as far as the company’s British partner is concerned.
Hours after the Simpson Group announced what sounded like a merger with U.K public company Inchcape, the multinational automotive distributor indicated that it was acquiring Simpson Motors and its InterAmerican Trading Corporation.
“The deal will expand Inchcape’s global footprint with entry into the Caribbean, further building on its presence in the Americas,” said Inchcape’s statement.
“It will also strengthen the Group’s geographic reach with Suzuki, Mercedes-Benz and Subaru, and broaden its QEM relationships, with the addition of Chrysler to its list of brand partners.”
According to the British-based company, the deal is expected to add 120 million pounds of annualized revenue, though they have not disclosed the details of the transaction.
Chief Executive Officer of the Inchcape Group, Duncan Tait noted that with the market for automotive distribution highly fragmented, there is a large opportunity for the company to drive consolidation.
“We are pleased to announce an agreement to further expand our distribution footprint in the Americas, with entry into the Caribbean.
This acquisition is a good example of our Accelerate strategy in action; leveraging our global distribution leadership to expand into new markets with both existing and new OEM partners,” said Tait.
“The combination of our leading global position, our digital and data capabilities, and our strong financial position, means we are well-placed to accelerate our growth ambition,” the CEO added.
The British company’s stated position is consistent with speculation from noted economist, Jeremy Stephen, who explained that the move would provide a major opportunity for Inchscape to make its mark in the Latin American market.
On the other hand, based on Inchscape’s release, it appears the Simpson Group will be making no inroads into the UK market as previously speculated.
On Monday, the locally-based regional company announced the developments in a release titled “a family affair”, in which founder, Sir Kyffin Simpson said the move was critical to its “next chapter”.
The veteran businessman provided very few details about the deal, which Stephen acknowledged was too vague for serious conclusions to be made.
“The structure of the deal is what matters and that would give you a better idea as to if there’s more investment potentially coming out of England in this dispensation. If it’s just a straight merger, it could be a case where [Sir Kyffin Simpson] may be retiring, and if you read into what was said in the release, you hear the thoughts of somebody who may be looking to step back altogether from the mind and management,” the economist explained.
(kareemsmith@barbadostoday.bb)
