AKRON (Dec. 28)—Titan International Inc. has completed its purchase of Goodyear's North American farm tire business for $100 million, following the approval of a new contract with the union at the Freeport, Ill., plant on Dec. 22.
The sale includes the farm tire factory, property and equipment in Freeport as well as inventories. Titan will pay a royalty to manufacture and sell Goodyear- and Kelly-brand farm tires in North America.
A new contract between Titan and the United Steelworkers was needed because of a successorship clause in the union's pact with Goodyear. The companies announced the deal in February, but it was held up on union talks.
Goodyear said it expects to report a loss of about $65 million on the sale, which will reduce revenue in its North American Tire segment by about $200 million annually. The company noted it won't have to invest in the farm tire business anymore.
Titan expects its 2006 sales to increase by about $250 million as a result of the deal.
"Closing the acquisition has been a long haul, and with this acquisition the Goodyear brand will again be the number one brand in North American farm tires, replacing Firestone," said Maurice "Morry" Taylor Jr., Titan chairman and CEO.
Titan said it will start production at the 41-year-old Freeport on Jan. 3 and make further announcements about the plant in the first quarter. Teh facility has annual production capacity of 10,000 units.