Toyo Tire & Rubber Co., Ltd. entered into a capital and business alliance agreement with Mitsubishi Corporation to issue new shares of Toyo Tire through a third-party allotment, which gives the carmaker a 20% stake in Toyo’s business.
Following the agreement, Toyo announced that shareholding ratios of its major and largest shareholder and other associated companies changed.
Under the agreement, the two companies will have autonomy but “will together seek to grow and enhance corporate value under a long-term partnership.” According to a release from Toyo, the Mitsubishi’s investment further strengthens the collaborative relationship between the two companies and will allow them to generate more synergies as well as permit Toyo to finance its planned capital investments.
To reflect the changes under the agreement, Toyo will change its corporate name to “Toyo Tire Corporation,” effective Jan. 1, 2019. “The new name also represents our pride and responsibilities as a mobility-centered business, and our determination to continue to grow Toyo Tire into a truly global brand, as well as our aspiration to begin a new chapter in our history, with a continuing commitment to a mobile society,” Toyo’s release said.
Beginning with Australia in 1974, Toyo and Mitsubishi have tapped new markets together by establishing tire sales joint ventures in various regions including Europe, China, Canada and Russia. As a result, the companies have developed a staunch business foundation of important markets next to Japan and the U.S.
Under the agreement, Mitsubishi’s stake in Toyo increased from 3.05% to 20%.
