The Australian tyre retailer, which is poised to post a pre-tax profit of up to $275 million on the sale, is the fourth biggest outlet of its type with 258 national stores and more than 1200 employees. It is also Australia’s biggest single employer of apprentice technicians.

Kmart Tyre & Auto Service (KTAS) was started in 1992 and became part of Coles, then fell under the Wesfarmers umbrella after Coles was bought in 2007.

German company Continental has operations in 60 countries and employs more than 243,000 people, and had sales in 2017 of $A69 billion. It has five divisions with its tyre retailing arm having more than 1400 stores around the world.

Wesfarmers managing director Rob Scott said the sale “crystallises value for shareholders” after its purchase as part of the Coles Group in 2007.

“We believe that the divestment is in the best interests of Wesfarmers’ shareholders, while giving the employees and customers of KTAS the opportunity to join a highly complementary business in Continental,” he said in a statement.

“Continental’s automotive industry expertise will further strengthen the business’ customer offering.”

The sale of KTAS comes as Wesfarmers is ready to make Coles a stand-alone public business.

Continental will use the KTAS name and logo for a transitional period following the sale.

Wesfarmers said that the sale is subject to certain consents and approvals including from the Australian Competition and Consumer Commission and the Foreign Investment Review Board.

Subject to these conditions, the sale is expected to completed within months.

By Neil Dowling