(July 10): Yokohama Rubber Co is in advanced talks to buy Goodyear Tire & Rubber Co’s off-the-road (OTR) tyre business for at least US$1 billion (RM4.71 billion), according to people familiar with the matter.
The Japanese company has emerged as the likeliest buyer of Goodyear’s OTR business after other suitors dropped out, the people said, asking not to be identified discussing confidential information. A transaction could value the assets at US$1 billion to US$1.5 billion, the people said.
Yokohama is in talks with banks to line up financing, one of the people said. Talks are ongoing and may not lead to a deal, the people said.
Representatives of Yokohama and Goodyear declined to comment.
Yokohama shares slid as much as 7.1% on Wednesday after the Bloomberg News report on the talks. That was the biggest intraday loss since November 2022. They were down 2.8% at ¥3,340 (RM97.38) at 2.50pm in Tokyo, the lowest since Jan 12.
An array of Japanese companies in industries ranging from industrials to healthcare and technology have been eyeing assets overseas to help diversify and expand amid sluggish growth at home.
Yokohama’s products include tyres for passengers cars, trucks and buses, as well as industrial vehicles and mining and construction equipment, its website shows. OTR tyres are used in industries such as mining.
The company’s other products include conveyor belts, rubber plates and marine fenders, as well as golf-related equipment. Yokohama’s stock had risen 6.3% this year through Tuesday, valuing the manufacturer at about US$3.6 billion.
Akron, Ohio-based Goodyear said in November last year it was pursuing alternatives for its chemical business, Dunlop brand and OTR unit, with the aim of raising at least US$2 billion. The company named it the “Goodyear Forward” plan.
Goodyear has warned of even greater competition in the tyre-making industry, with rival manufacturers ramping up capacity in low-cost countries and aggressively seeking market share. Goodyear’s main competitors globally include Bridgestone Corp and Michelin.
Goodyear shares have fallen 26% this year. Its market value stood at US$3 billion.
Uploaded by Tham Yek Lee