Japan Yokohama Rubber Buys Goodyear (GT.US) OTR Tire Business for up to $1.5 Billion

According to sources, Yokohama Rubber Co. is in advanced talks to buy Goodyear Corp.’s off-the-road (OTR) tire business for at least $1 billion. The Japanese company has emerged as the most likely buyer of Goodyear’s OTR business after other bidders dropped out, the sources said. The deal would value the assets at between $1 billion and $1.5 billion.

The sources said Yokohama Rubber is in talks with banks about financing. The negotiations are ongoing and a deal may not be reached, the sources said.

The shares of Yokohama Rubber Co. fell as much as 7.1% on Wednesday, the biggest intraday drop since November 2022.

Under the deal, Yokohama Rubber would buy Goodyear’s OTR business, which includes tires for mining, construction and other off-road vehicles. Yokohama Rubber’s website lists products for passenger cars, trucks and buses, as well as tires for industrial vehicles, mining and construction equipment.

Goodyear said in November that it was seeking other options for its chemical business, Dunlop brand and OTR division, with a goal of raising at least $2 billion.

Goodyear warned that the tire industry would become more competitive as rivals in low-cost countries increased capacity and aggressively sought market share. Its main global rivals include Bridgestone and Michelin.

Goodyear shares were up 1.13% at $10.72 at the time of writing, having fallen 26% this year to $3 billion in value.