Yokohama said it will integrate Goodyear's product line, which includes OTR tire sizes from rim diameters of up to 25 inches to larger tires with diameters of 49 to 63 inches, into its OTR portfolio, "expanding the value range of Yokohama Rubber's OHT (off-highway tire) business."
The sale does not include Goodyear's OTR business for U.S. military and defense operations. Once the transaction closes, Goodyear said a "Product Supply Agreement" takes effect: Goodyear will manufacture certain OTR tires for Yokohama at some of its manufacturing locations initially for up to five years.
Goodyear President and CEO Mark Stewart called the sale "an important milestone" as the Akron-based tire maker implements its Goodyear Forward plan, an initiative announced last year in which Goodyear said it also will divest its Dunlop brand and chemicals business as well.
The goal of the plan is to raise $2 billion, which Goodyear said it would use to pay down debt, bolster its sales and brands and ultimately raise its stock prize.
"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," Stewart said.
Yokohama said the acquisition expands and enhances the tire maker's corporate value. It estimated the global OHT business at more than $25.5 billion, and said it expects that business to grow 6 percent, compared with a projected 2 percent growth rate for the consumer tire business.
Yokohama Rubber Group called itself "well positioned in the global market for agriculture and forestry machinery tires," which the company estimates to be about 40 percent of the global OHT market.
The acquisition will serve to complement Yokohama Rubber's OHT product range in non-agricultural applications across different tire size and value ranges "by bringing in the strong brand power of Goodyear's OTR business into the Group," Yokohoma said in a news release.
Yokohama also noted that the transaction will bolster its product development and production abilities for large and ultra-large tires that it currently does not have, giving the company "access to a new group of customers" while supplementing production and supply for other high-demand tire sizes.
"Having strong product lineups in all OHT categories will enable Yokohama Rubber to better serve the needs of its customers," the company said.
Yokohama said it will benefit from synergies of the "combined strengths" of both companies' OTR businesses, "from the development of new products and services to manufacturing, sales, quality control, and ESG (environmental, social and governance)."
The acquisition is part of its Yokohama Transformation 2026 (YX2026) new medium-term management plan in which the tire make implemented for fiscal years 2024–2026.
As part of the plan, Yokohama said it "plans to further advance the 'exploitation' of the strengths of its existing businesses and the 'exploration' of new value and complete the transformation begun under its previous medium-term management plan YX2023, while being mindful to not leave any negative legacies for the next generation."
Yokohama said the plan implements growth strategies established for each of its businesses targeting "hockey stick growth" during fiscal 2027.
Goodyear said that Evercore is acting as its exclusive financial adviser and Sullivan & Cromwell L.L.P. is acting as legal adviser.
Hiratsuka-based Yokohama employs more than 28,000 globally, operating in more than 120 countries. It generated $7.02 billion in revenue in 2023, according to the company, including $6.23 billion in tire-related sales.
According to Rubber News' Global Tire Report, Goodyear ranks as the third-largest tire maker in the world, with fiscal 2022 global sales of $17.9 billion.
Yokohama, meanwhile, ranks eighth, with fiscal sales of $5.7 billion, below No. 7 Hankook Tire & technology Co. Ltd., with sales of $6.3 billion. Those numbers, however, included sales only after the acquisition of Trelleborg Wheel Systems was finalized in May.
