Goodyear Tire & Rubber Sells Off-the-Road Business to Yokohama Rubber for $905 Million.
Goodyear is going through some streamlining operations. Back in March of this year, we learnt that the Asia Pacific division would be shutting down its plant in Shah Alam. Now, Reuters reports that Goodyear Tire & Rubber on a global level has decided to sell off its “Off-the-Road” (OTR) equipment tyre business to Yokohama Rubber.
You probably haven’t heard of “Off-the-Road” and the abbreviation confusingly usually stands for “On-the-Road” when referring to car pricing including the various legally required fees and taxes. So we’ll stick to calling the business unit by its full name for the remainder of this piece. Off-the-Road is Goodyear Tire & Rubber’s business unit in charge of heavy duty tyres for off-road equipment involved in mining, construction and other challenging environments.
Goodyear Tire & Rubber have decided that this profitable division is better off being sold off to help it streamline its operations and optimise its business portfolio. Off-the-Road was purchased by Yokohama Rubber for US$905 million in cash. The sale was announced yesterday and is expected to close by early 2024 subject to regulatory approvals. Even after the sale is complete, Goodyear will continue to manufacture some Off-The-Road tyre products for Yokohama Rubber possibly until 2030.
This divestiture is part of a plan for the company generate at least US$2 billion in gross proceeds. These changes come following the appointment of former Stellantis executive Mark Stewart as its new CEO in early 2024. The move was also reportedly influenced by shareholder Elliot Investment Management L.P. You can read their May 2023 letter here. Other divisions that are on the chopping block include Goodyear’s chemical unit and the Dunlop brand altogether. On the other side of this transaction is Yokohama Rubber, whose US$905 million purchase will net them all shares of Nippon Giant Tire, Goodyear Earthmover in Australia and various Off-the-Road assets worldwide.
