AKRON—Goodyear has finalized its $905 million divestiture of its off-the-road tire business to Yokohama Rubber Co. Ltd.
As part of the sale, Yokohama acquires Nippon Giant Tire Co. Ltd., which operates an OTR plant in Tatsuno City, Japan; as well as Goodyear Earthmover Pty. Ltd. in Australia; a retread plant in North Bay, Ontario; and other "OTR assets at other plants and facilities around the world."
The sale did not include Goodyear's operations in Topeka, Kan., where Goodyear announced a $125 million investment in September 2022. The plant manufactures commercial tires. It also does not include Goodyear's OTR business for U.S. military and defense operations.
With the transaction closed, 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.
The deal, first announced in July 2024, is an all-cash transaction and part of the company's "Goodyear Forward" plan to streamline its business model, President and CEO Mark Stewart said.
"The sale of the OTR business is a significant milestone in Goodyear's transformation," he said. "Our portfolio is now more streamlined, driving further efficiencies and enhancing our focus on our core industry-leading products and services."
Goodyear said it intends to use transaction proceeds from the OTR sale to reduce leverage and fund initiatives in connection with the Goodyear Forward transformation plan.
The company's OTR business unit employs about 500 and posted fiscal sales of approximately $678 million in 2023.
For YRC, this deal is the latest step in growing its OTR business. The company finalized a deal to acquire Trelleborg Wheel Systems for $2.3 billion in 2023, and believes these two acquisitions to be foundational pieces of its "Yokohama Transformation 2026" plan, which is set to drive "hockey stick growth."
"The acquisition is a key part of Yokohama Rubber's effort to expand its off-highway tire (OHT) product lineup and its production and supply capabilities in all OHT categories, including tires for mining and construction machinery, as it seeks to strengthen its market position and competitiveness in the OHT business and enhance its corporate value," Yokohama said.
Goodyear's OTR business supplies tires in large- and ultra-large sizes, ranging from 49- to 63-inch rim diameters, Yokohama said. In addition to increasing its portfolio, the Hiratsuka, Japan-based company is looking forward to accessing Goodyear's advanced business technology.
"Yokohama Rubber plans to include the acquired business in its consolidated results from the first quarter of 2025 and is currently examining the addition's estimated impact on consolidated earnings," Yokohama said. "The acquisition is a strategic investment aimed at achieving "Hockey Stick Growth" during Yokohama Transformation 2026 (YX2026), the company's medium-term management plan for fiscal years 2024-2026."
Tire Business Editor Don Detore contributed to this report