Goodyear selling off-the-road tire business in $905 million cash deal

Goodyear Tire & Rubber Co. plans to sell its off-the-road tire business to The Yokohama Rubber Co . in a nearly $905 million cash deal.

Goodyear's off-the-road (OTR) tire business includes tires used for global applications including "surface and underground mining, construction and quarry, and port and industrial end markets," according to a news release.

Goodyear will continue to provide OTR tires for U.S. military and defense purposes, according to the release.

“We are grateful to our OTR colleagues who have driven the success of the business and are committed to working closely with Yokohama to ensure a smooth transition for customers and associates," Goodyear CEO and President Mark Stewart said in a prepared statement.

Subject to a product supply agreement with Yokohama, per the release, "Goodyear will manufacture certain OTR tires for Yokohama at some of its manufacturing locations for an initial period of up to five years after the closing of the transaction."

Goodyear said it expects the deal to close in early 2025, "subject to regulatory approvals, other customary closing conditions and consultations."

Evercore is serving as financial adviser to Goodyear, and Sullivan & Cromwell LLP is acting as the company's legal adviser, according to the release.

Law firm Freshfields Bruckhaus Deringer advised Yokohama on the deal, according to a news release from the firm.

The transaction will include Yokohama Rubber's acquisition of all shares of Nippon Giant Tire Co. Ltd, which operates an OTR plant in Tatsuno, Japan, and Goodyear Earthmover Pty Limited in Australia, as well as other as sets of other global plants and facilities, Yokohama Rubber stated in a Monday press release.

A Goodyear spokesperson declined further comment about the sale to the Beacon Journal on Monday, aside from forwarding an investor presentation about the "Goodyear Forward" plan.

Why is Goodyear selling its off-the-road tire business?

The sale of Goodyear's off-the-road tire business is part of its Goodyear Forward plan that the company announced in November .

Christina Zamarro, Goodyear executive vice president and chief financial officer, said during a November investor call that the business was exploring the sale of three of the company's businesses to create a total of $2 billion in revenue.

In addition to the OTR business, the other two businesses that Zamarro said Goodyear was weighing selling at the time were Goodyear's Dunlop business and its chemical segment, in which the company develops synthetic compounds for rubber manufacturing.

What is the Yokohama Rubber Co.?

The Yokohama Rubber Co. was founded in Yokohama, Japan, in 1917 as a joint venture between the Yokohama Electric Cable Manufacturing Company — predecessor of Furukawa Electric Co. — and the BFGoodrich Company, according to the Yokohama Rubber Company's website .

Yokohama Rubber Co. added U.S. operations in 1969 with the establishment of its North American manufacturing and tire business, Yokohama Tire Corp., according to the Yokohama Tire Corporation's website .

Over the years, the Yokohama Rubber Co. has manufactured and sold tires for passenger cars, trucks, buses, race cars, motorcycles, bicycles and OTR applications, according to its website . Its business has also included the development and sale of other products, such as rocket-engine components and golf clubs.

Patrick Williams covers growth and development for the Akron Beacon Journal. He can be reached by email at pwilliams@gannett.com or on X, formerly known as Twitter, @pwilliamsOH.

This article originally appeared on Akron Beacon Journal: Goodyear selling off-the-road tire business in $905 million cash deal