Yokohama buys Goodyear's OTR business

Yokohama Rubber has announced the signing of an agreement to acquire the Goodyear division, which produces and markets off-the-road (OTR) tires used in the mining and construction industries, among others. The agreed-upon deal price is $905 million, and it is expected to be closed after receiving approvals from regulatory authorities.

Currently, Yokohama is implementing its medium-term development plan, Yokohama Transformation 2026 (YX2026), under which the company intends to "continue to utilize the strengths of its businesses and complete the transformation started during the implementation of the YX2023 strategy." Yokohama notes that the global OTR tire market is estimated at $26 billion and is expected to grow annually by 6%, which is significantly higher than the forecasted growth in the consumer segment (2%). The company already holds good positions in the agricultural and forestry tire sector, which accounts for about 40% of the global OTR tire market.

In 2023, Goodyear's OTR tire division generated revenue of $678 million, with an EBITDA profit of $129 million and a margin of 19%.

"Goodyear's mining and construction industry tires have a high reputation worldwide due to a strong brand, the use of advanced technologies, and the provision of specialized services by highly qualified personnel," Yokohama notes. "The product line includes a wide range of sizes, including compact tires with diameters up to 25 inches and large and ultra-large tires with diameters from 49 to 63 inches."

As part of the deal, Yokohama will become the owner of all shares of Nippon Giant Tire Co., Ltd, which produces tires at a plant in Tatsuno (Hyogo Prefecture, Japan), and Goodyear Earthmover Pty. Ltd, based in Australia, as well as assets in other countries.

"The acquisition of Goodyear's OTR business will allow Yokohama Rubber to expand its product range in various size and price segments," the Japanese company says. "In particular, the product line will be expanded in some segments beyond agriculture, as well as in the market for agricultural and forestry tires. Additionally, new opportunities will be created for the development and production of large and ultra-large tires, which the company does not currently have. This will give Yokohama Rubber access to a new group of customers, increase its production capacity, and allow it to meet the demand for high-demand tires."

The Goodyear OTR tire division employs approximately 500 people, and Yokohama has already acquired two OTR tire manufacturers in recent years: Alliance Tire Group (ATG) and Trelleborg Wheel Systems (TWS).