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California | BRIEFLY / AUTOS

Ford to Buy Scottish Car-Repair Chain

April 13, 1999|Times Wire Services

Ford Motor Co. reached an agreement to buy car-repair chain Kwik-Fit Holdings of Scotland for about $1.6 billion in cash, expanding its service business and giving it a sure customer for Ford parts. Ford's president and chief executive, Jacques Nasser, said the deal will bring the world's second-largest auto maker closer to becoming the world's leading consumer company for automotive products and services. The auto repair chain was founded by Chairman Tom Farmer in 1971 and has about 1,900 specialist tire, exhaust and brake-fitting outlets in Britain, Ireland and continental Europe. It also has an insurance business. Most of Kwik-Fit's revenue comes from repairs made after a vehicle's warranty expires, the most profitable business for auto makers. Profit margins in the auto-repair business--about 10% of sales--are bigger than those in car manufacturing, which are about 6%, analysts and industry executives said. Under the Ford deal, Kwik-Fit would maintain its headquarters in Edinburgh and retain its 9,500 or so employees. The transaction is subject to approval by Kwik-Fit shareholders at a special meeting, probably to be scheduled within the next two months.

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