QUINCY, Ill. (March 1, 2010)—Titan International Inc. expects to make a decision on its bid for certain Goodyear farm tire-related assets in Europe by the end of March, Titan Chairman and CEO Maurice Taylor Jr. told analysts.
Farm and OTR tire and wheel maker Titan entered into a non-binding letter of intent with Goodyear last September to investigate the purchase of Goodyear's European farm tire business, which would include the Goodyear Dunlop Tires France factory in Amiens, France.
At the time, Titan said the deal is subject to the satisfactory completion by Goodyear Dunlop of a social plan at the Amiens plant related to consumer tire activity, along with completion of due diligence, a definitive acquisition agreement and other standard acquisition approval requirements.
Goodyear notified workers at the 49-year-old Amiens plant in May 2009 it intends to stop producing passenger and light truck tires by late 2010 there. The negotiations with the works council are related to that move, which would eliminate more than 800 jobs at the factory.
If completed, the deal would mark Titan's first tire manufacturing capacity in Europe.
In Titan's year-end financial report, Taylor said of the negotiations: “We will only finalize any transaction if it makes sense businesswise and financially. In short, we are not going to roll the dice.”
Goodyear has been exploring the sale of its farm tire businesses in Latin America and Europe/Middle East/Africa since May. At the time it termed sales of the units “not material” to its overall revenues.
Goodyear sold its North American farm tire operation—including a factory in Freeport, Ill.—in 2005 to Titan, which continues to sell Goodyear-brand farm tires in North America.
Goodyear also has some farm tire capacity in Europe at plants in Montlucons, France, and Debica, Poland.
Goodyear opened the farm tire plant in 1949 and acquired a second plant in Amiens, for car tires, in 1999 with its purchase of Sumitomo Rubber Industries Ltd.'s Dunlop Tire-related assets in Europe and North America.
Should the deal fall through, Taylor said he has other acquisition targets in mind, but he didn't identify them. Last December he bid in a bankruptcy court auction for certain OTR tire-related assets of GPX International Inc.; Israel's Alliance Tire Co. Ltd. outbid Titan for those assets.
Subject to the terms of indebtedness, the company said in its 10-K filing with the Securities and Exchange Commission it may finance acquisitions with cash on hand, cash from operations, additional indebtedness and/or by issuing additional equity securities.