The Goodyear Tire & Rubber Company has announced that it will sell its Off-the-Road (OTR) tyre business to Yokohama Rubber Company. The two companies today signed a definitive agreement for the transaction which is valued at US$905 million (about RM4.24 billion) in cash.
The move by the American tyremaker, to be completed by next year, is in connection with the Goodyear Forward transformation plan. Goodyear intends to use transaction proceeds to reduce leverage and fund initiatives in connection with the transformation plan.
While many may imagine that the OTR business is related to products such as the well known Wrangler tyres used on SUVs, it is actually a business unit which makes and sells tyres for vehicles used in surface and underground mining, construction and quarry, and port and industrial markets.
Goodyear began making such specialised tyres in 1934. The OTR business includes retreads, which are made with the same compounds and designs as their original Goodyear counterparts.
Pursuant to a Product Supply Agreement to be entered into with Yokohama in connection with the closing of the transaction, Goodyear will manufacture certain OTR tyres for Yokohama at some of its manufacturing locations for an initial period of up to 5 years beyond 2025. However, Goodyear will retain its business which handles supply for U.S. military and defense applications.
Yokohama has also been present in the OTR business for many years with its own line of products for heavy vehicles. The acquisition of Goodyear’s business is intended to broaden its product range and expand the business as well.
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