AKRON — It's official: Yokohama Rubber Co. Ltd. has completed its acquisition of Goodyear's off-the-road (OTR) tire business in an all-cash transaction of approximately $905 million.
Goodyear announced the completion of the sale on Feb. 3, around six months after originally announcing the pending transaction.
"The sale of the OTR business is a significant milestone in Goodyear's transformation," Goodyear Chief Executive Officer and President Mark Stewart said in a statement. "Our portfolio is now more streamlined, driving further efficiencies and enhancing our focus on our core industry-leading products and services."
The OTR business manufactures specialized tires for the mining and construction industries among others.
The move is part of the implementation of the Goodyear Forward plan, an initiative announced in 2023 in which Goodyear said it would also divest its Dunlop brand and chemicals business.
In early January, Goodyear announced it had agreed to sell the North American and European rights to the Dunlop tire brand — which has roots dating back more than 130 years — to Sumitomo Rubber Industries Ltd. (SRI) for approximately $701 million in cash. Goodyear has controlled the Dunlop brand in North America and Europe since 1999 as part of a global alliance with SRI, and retained those rights in 2015 when the companies dissolved their alliance.
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.
As part of the sale, Yokohama acquired 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, Canada, and other "OTR assets at other plants and facilities around the world."
The sale did not include Goodyear's operations in Topeka, Kansas, 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.
Goodyear's OTR business posted fiscal sales of approximately $678 million in 2023, with earnings before interest, taxes and amortization (EBITA) of about $129 million. Goodyear's OTR unit employs around 500.
At the time of the announcement of the sale, Yokohama said it would integrate Goodyear's product line, which includes OTR tire sizes from rim diameters of up to 25 inches to larger tires with diameters of 49 to 63 inches, into its OTR portfolio, "expanding the value range of Yokohama Rubber's OHT (off-highway tire) business."
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.
Yokohama said it will include the acquired business in its consolidated results from the first quarter of 2025 and said it currently is examining the new units estimated impact on consolidated earnings.
The acquisition, Yokohama said, is part of a strategic investment aimed at "Hockey Stick Growth" during Yokohama Transformation 2026 (YX2026), the tire maker's medium-term management plan for fiscal years 2024-26.
Yokohama said the new unit not only adds a lineup of mining and construction machinery tires that it currently doesn't offer, with rim diameters ranging from 25 inches or less to large- and ultra-large sizes of 49 to 63 inches, but it also provides "Goodyear business' advanced technologies, strong brand power and professional services provided by skilled staff."
The acquisition is a key part of Yokohama'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.
The company said the acquisition gives it "access to a new group of customers" while supplementing production and supply for other high-demand tire sizes.
Yokohama has estimated the global OHT business at more than $25.5 billion, and said it expects that business to grow 6%, compared with a projected 2% growth rate for the consumer tire business.
In March, 2022, Yokohama reached an agreement to purchase Trelleborg A.B.'s Trelleborg Wheel Systems (TWS) business for $2.3 billion in a cash and debt-free basis.
Evercore acted as exclusive financial advisor for the Yokohama-Goodyear transaction, and Sullivan & Cromwell LLP acted as legal advisor to Goodyear.