TOKYO (Dec. 2, 2013) — Yokohama Rubber Co. Ltd. and South Korea's Kumho Tire Co. Inc. have agreed to discuss possible technology exchanges and cross ownership.
The two firms, the world's eighth and 12th largest tire makers, disclosed today they signed a memorandum of understanding on Nov. 29 covering the various aspects of their interest.
By exchanging technology, the companies "aim to increase their competitiveness and enhance their growth potential…by sharing R&D resources and making more effective use of them through joint research and development on tires and related technologies," Yokohama said.
The companies also plan to enter into a "capital alliance" based on cross-shareholdings.
Yokohama and Kumho Tire will start discussions on the details of the alliance—including methods for obtaining each other's shares, the size of shareholdings and the timing of acquisition—with the aim of signing a legally binding contract as early as possible.
Yokohama is the world's No. 8 tire maker with $5.57 billion in tire-related sales in 2012, while Kumho was ranked No. 12 with $3.6 billion, according to Tire Business' annual ranking of the world's largest tire companies.
Yokohama operates 12 tire plants in seven countries, while Kumho has eight plants in three countries.