TOKYO—Yokohama Rubber Co. Ltd. has struck a deal to buy off-road tire maker Alliance Tire Group for $1.18 billion, expanding Yokohama's OTR tire business measurably and putting the Japanese maker into the agricultural tire sector for the first time.
Yokohama's deal is with global investment firm KKR & Co. L.P. and other concerned parties to purchase all of the shares of Mumbai, India-based Alliance Tire Group. The acquisition is expected to be finalized on July 1, 2016, after completion of all necessary closing procedures, including regulatory approvals, YRC said.
KKR bought a controlling stake in ATG in April 2013 from an affiliate of private equity firm Warburg Pincus. Yogesh Mahansaria, founder of ATG, retained an undisclosed ownership stake in the company.
Alliance reported sales of $529 million in fiscal 2015, according to YRC, with an operating profit of $95 million. The company has three tire plants—in Hadera, Israel; and Tirunelveli and Dahej, India, the latter of which opened in late 2014. ATG also contracts out production to manufacturers in China and Taiwan.
It goes to market with three brands: Alliance, Galaxy and Primex.
YRC produces OTR tires at a plant in Onomichi, Japan, and via an off-take agreement with Shandong Xingda Tyre Co. Ltd. of Dongying, Shandong, China, but it does not produce or sell agricultural tires.