An agreement has been reached for Yokohama to purchase Goodyear’s OTR tire business. The OTR segment provides specialized tires for the mining and construction industries among others. The agreed acquisition price is US$905m, with completion conditional on the usual regulatory approvals.
The acquisition of Goodyear’s OTR business is a strategic investment in line with the tire maker’s goal of ‘hockey stick growth’ key to its Yokohama Transformation 2026 (YX2026) medium-term management plan. YX2026 positions the off-highway tire sector as a future growth driver, with M&A being one of the growth strategies to expand Yokohama Rubber’s off-highway business. The acquisition of Goodyear’s OTR business will contribute to that expansion and enhance Yokohama’s corporate value.
The global off-highway tire market is estimated to grow 6% a year – considerably higher than the projected 2% annual growth for the consumer tire market. The Yokohama Group is currently well positioned in the global market for agriculture and forestry machinery tires, which is estimated to account for about 40% of the global off-highway market. The acquisition will serve to complement Yokohama’s product range in non-agricultural applications by bringing the brand power of Goodyear’s OTR business into the group.
Goodyear’s mining and construction machinery tires are globally recognized products with strong brand power realized by the use of the most advanced tire-making technologies and specialized services provided by its highly skilled professional staff. The product line-up covers a wide range of OTR sizes, from smaller tires with diameters of up to 25in to large and ultra-large tires with diameters of 49-63in. Integration of these large and ultra-large tires into Yokohama’s product line-up will expand the product and value range of Yokohama’s off-highway business.
Yokohama Rubber Company will acquire all shares of Nippon Giant Tire, which operates the dedicated OTR plant in Japan (Tatsuno, Hyōgo Prefecture), and Goodyear Earthmover Pty in Australia, as well as certain OTR assets at the other plants and facilities around the world.
“The sale of the OTR business marks an important milestone as we continue to execute against our Goodyear Forward transformation plan,” said Mark Stewart, Goodyear CEO and president. “We are grateful to our OTR colleagues who have driven the success of the business and are committed to working closely with Yokohama to ensure a smooth transition for customers and associates.”
Goodyear will retain its business providing OTR tires for US military and defense applications. Pursuant to a product supply agreement to be entered into with Yokohama in connection with the closing of the transaction, Goodyear will manufacture certain OTR tires for Yokohama at some of its manufacturing locations for an initial period of up to five years after the closing of the transaction.
