Goodyear Tire & Rubber Co. has completed the sale of its Latin American farm tire business to Titan Tire Corp. for approximately $99 million, subject to post-closing conditions and adjustments, for the Latin American business.
The transaction includes Goodyear’s Sao Paulo, Brazil, manufacturing plant, property, equipment and inventories and a licensing agreement that will allow Titan to sell Goodyear-brand farm tires in Latin America and North America.
“This transaction reinforces our focus on targeted market segments,” said Rich Kramer, Goodyear chairman and CEO. “Our Latin American farm tire operations have been very successful for many decades. I’m confident this will continue and that Titan will maintain our strong relationships with Goodyear farm tire customers.”
“We are very excited to have purchased these great assets for Titan,” said Morry Taylor, Titan chairman and CEO. “Over the next 18 to 24 months, we believe Latin America revenue can grow up to approximately $400 million by adding OTR radials and other earthmover and construction tires to the facility. This expansion into Latin America supports our global vision of becoming the world’s premier farm tire manufacturer. The European portion of the transaction is pending as Goodyear works through the closing requirements.”
Total revenue from the Sao Paulo plant is about $250 million annually, which includes approximately $125 million of farm product sales and $125 million in non-agriculture product that Titan will build for Goodyear under supply agreements, according to Titan.
Goodyear added that assuming the European portion of the transaction is completed, the tiremaker’s operating results, excluding any gain or loss on the sales, are not expected to be materially affected, although the impact on segment operating income will vary by region.
