Yokohama Rubber acquiring Alliance Tire Group

On 25 March, the Yokohama Rubber Co. Ltd. announced it has reached an agreement with global investment firm KKR and three other parties to purchase all shares in Alliance Tire Group (ATG) for an agreed equity value of US$1,179 million. The transaction is expected to be finalised on 1 July 2016, after the completion of all necessary closing procedures, including regulatory approvals.

At present, KKR AT Dutch BV holds an 87.48 per cent share in off-highway tyre specialist Alliance Tire Group BV, with Yogesh Agencies and Investments Private Limited holding a further 10.01 per cent. Additional shareholders include International Finance Corporation (2.25 per cent) and Zubin Dubash (0.26 per cent).

Yokohama Rubber does not currently manufacture or sell tyres for agricultural or forestry machinery, and states that its acquisition of ATG will “strengthen Yokohama Rubber’s product line-up in commercial tyres.” The Japanese company is currently in the fourth phase of its ‘Grand Design 100’ medium-term management plan, which establishes the expansion of Yokohama Rubber’s commercial tyre business as a “new core pillar” of its tyre business strategy. Yokohama Rubber says it is now “devoting considerable resources” to develop and expand sales of ultra-large radial tyres for mining and construction equipment. In addition, the tyre maker recently started producing truck and bus tyres at a new plant in the USA, and plans to continue promoting local production for local consumption.

ATG achieved consolidated net sales of US$529 million in the 12 months to 31 December 2015, down from $543 million a year earlier. Operating income increased 5.6 per cent to $95 million, while net income rose 16.7 per cent to $39 million.