Yokohama Rubber Extends Commercial Tire Business with ATG Acquisition

The Yokohama Rubber Co., Ltd. is spreading its wings globally with the acquisition of the Alliance Tire Group. In a USD 1179 million deal, the Japanese tire manufacturer will be acquiring all the shares of ATG through several intermediaries including global investment firm KKR. It is expected that the deal will be finalized by 1 July 2016, after all the legal procedures including regulatory approvals are complete.

ATG is a company that specializes in the commercial tire business and produces bias and radial tires for industrial, agricultural, forestry and construction vehicles and forestry vehicles. It operates in 120 countries spread across the world though it primarily caters to the European and North American markets. It is a perfect fit for Yokohama’s expansion as the company currently does not have products for the agricultural or forestry sectors and this acquisition will help Yokohama to expand its product portfolio.

In view of the increasing gap between the need for food and its availability, agricultural machinery will be increasing adopted to optimize farming efficiency leading to a growth in the demand for tires in this sector.

Yokohama Rubber had adopted a Grand Design 100 (GD100) medium-term management plan to improve its growth and profitability. The company is currently in Phase IV (2015–2017) of this plan and is seeking to expand its presence in the commercial tire sector as one of the pillars of its tire business strategy. It is also devoting considerable resources to developing and expanding sales of ultra-large radial tires for mining and construction equipment.

Recently, Yokohama Rubber started production of truck and bus tires at a new factory in the U.S. state of Mississippi. The ATG acquisition will strengthen the Yokohama Group’s business in commercial tires and accelerate its ongoing globalization.