QUINCY, Ill. (Dec. 14, 2011)—Titan International Inc. is still interested in acquiring Goodyear's European farm tire business and will entertain discussions to that end once Goodyear has resolved social issues surrounding workers at a French plant that's core to the deal, Chairman and CEO Maurice Taylor told analysts Dec. 13 in a conference call.
Titan's option to buy Goodyear's European farm tire business—dating from December 2010—expired Nov. 30 after Goodyear was unable to complete a social plan related to the previously disclosed phase-out of consumer tire production at the Amiens plant.
Goodyear originally put its European and Latin American farm tire businesses up for sale in May 2009. Titan agreed in December 2010 to buy both businesses and closed on the Latin American assets—a plant in Sao Paulo, Brazil, property, equipment and inventories—in March.
The purchase price was expected to be about $17 million, Goodyear said.
Taylor had estimated on a number of occasions that the business, which includes sales territories throughout eastern Europe/Russia, Africa and the Middle East, has a potential for about $400 million in annual revenue short term.
After the deal lapsed on Nov. 30, Taylor said Titan would revisit other possible acquisition candidates, but he declined during the conference call to elaborate.
Taylor is projecting Titan's sales next year will jump as much as 36 percent to as much as $1.9 billion on strong demand from the company's key markets. That growth could lead to a pre-tax operating income of $225 million to $300 million, or roughly 13 to 15 percent of sales, he said.
During the conference call, he said sales could even push the $2 billion threshhold, depending on how quickly and efficiently the firm can put newly acquired compounding capacity to good use.