Yokohama Acquires Goodyear's Off-The-Road Tire Business for $905M

The Goodyear Tire & Rubber Company has signed a definitive agreement to sell its Off-the-Road (OTR) tire business to The Yokohama Rubber Company, Limited (TYO: 5101) for $905 million in cash. This transaction is a significant step resulting from Goodyear's strategic review of the OTR tire segment, which aligns with its Goodyear Forward transformation plan aimed at streamlining operations and focusing on core business areas. The sale will enhance Goodyear's financial position and allow for reinvestment in growth initiatives, while Yokohama will expand its footprint in the OTR tire market, reinforcing its global market presence.

Goodyear's Off-the-Road (OTR) tire business is renowned for delivering top-tier tires globally across various sectors, including surface and underground mining, construction, quarry, and port and industrial markets. The OTR division offers a robust portfolio of high-quality products, services, and tire management solutions designed to enhance operational efficiency and productivity. Through its comprehensive suite of solutions, Goodyear OTR helps customers optimize their operations, providing reliable performance and support in demanding environments. The sale to Yokohama will allow Goodyear to focus on its core competencies while Yokohama benefits from an expanded presence in these critical industrial sectors.

Goodyear will maintain its OTR tire operations specifically for U.S. military and defense applications. Under a forthcoming Product Supply Agreement with Yokohama, Goodyear will continue to produce select OTR tire models for Yokohama at its facilities for an initial term of up to five years following the transaction's completion.

Mark Stewart, Goodyear's Chief Executive Officer and President, highlighted the significance of the sale of their Off-The-Road (OTR) business as a key milestone in their Goodyear Forward transformation plan. He expressed gratitude to the OTR team for their contributions to the business's success and emphasized Goodyear's commitment to a seamless transition. Stewart assured that the company would collaborate closely with Yokohama to ensure that both customers and associates experience a smooth handover, reflecting Goodyear’s dedication to maintaining strong relationships and operational continuity during the transition.

The transaction, valued at $905 million, is subject to regulatory approvals, customary closing conditions, and consultations, with an anticipated completion by early 2025. Goodyear plans to utilize the proceeds from the sale of its Off-the-Road (OTR) tire business to lower its leverage and support various initiatives under the Goodyear Forward transformation plan. This strategic move is designed to enhance Goodyear's financial flexibility, allowing for reinvestment in key areas and accelerating the company’s ongoing transformation efforts.

Evercore is serving as the exclusive financial advisor, while Sullivan & Cromwell LLP is providing legal counsel to Goodyear in this transaction.