 "Yokohama Rubber to acquire off-highway tyre maker")
The Yokohama Rubber Co Ltd has reached an agreement with global investment firm KKR and other parties to buy all of the shares of Alliance Tire Group (ATG) as part of its plans to expand its commercial tyre business. The agreed equity value of the transaction is $1,179 million.
According to a press release issued by Yokohama Rubber, the acquisition is expected to be finalised on July 1, 2016, after completion of all necessary closing procedures, including regulatory approvals.
ATG has developed a highly specialised business in the manufacture and sale of tyres for agricultural, industrial, construction and forestry machinery. The company sells radial and bias tyres for such vehicles in 120 countries, with a focus on the North American and European markets.
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Yokohama Rubber does not currently manufacture or sell tyres for agricultural or forestry machinery. The acquisition of ATG will strengthen Yokohama Rubber’s product lineup in commercial tyres.
Agricultural equipment tyre demand is expected to increase as a result of the growing use of agricultural machinery, which is crucial to improve agricultural efficiency to meet the increasing food needs for the world’s growing population.
Yokohama Rubber is currently in phase-IV (2015–2017) of its Grand Design 100 (GD100) medium-term management plan. This plan has established the expansion of the business in commercial tires as a new core pillar of Yokohama Rubber’s tyre business strategy, and the Company is accordingly devoting considerable resources to developing and expanding sales of ultra-large radial tyres for mining and construction equipment.
Yokohama Rubber recently started production of truck and bus tyres at a new plant in the US state of Mississippi, and it plans to continue promoting local production for local consumption. The ATG acquisition will strengthen the Yokohama Group’s business in commercial tyres and accelerate its ongoing globalisation.
