Goodyear tyres
Goodyear’s main competitors globally include Bridgestone Corp., Continental AG and Pirelli & C. SpA. Image Credit: AFP

Yokohama Rubber Co. is in advanced talks to buy Goodyear Tire & Rubber Co.’s Off-the-Road tire business for at least $1 billion, according to people familiar with the matter.

The Japanese company has emerged as the likeliest buyer for Goodyear’s OTR business after other suitors dropped out, the people said, asking not to be identified discussing confidential information. A transaction could value the assets at $1 billion to $1.5 billion, the people said.

Yokohama Rubber is in talks with banks to line up financing, one of the people said. Talks are ongoing and may not lead to a deal, the people said.

A representative for Yokohama Rubber didn’t immediately respond to a request for comment. Goodyear declined to comment.

Yokohama’s shares slid as much as 7.1 per cent Wednesday, after the Bloomberg News report on the talks. That’s the biggest intraday loss since November 2022.

An array of Japanese companies in industries ranging from industrials to health care and technology have been eyeing assets overseas to help diversify and expand amid sluggish growth at home.

Yokohama’s products include tires for passengers cars, trucks and buses, as well as industrial vehicles and mining and construction equipment, its website shows. OTR tires are used in industries such as mining.

The company’s other products include conveyor belts, rubber plates and marine fenders, as well as golf-related equipment. Yokohama’s stock had risen 6.3 per cent this year through Tuesday, valuing the manufacturer at about $3.6 billion.

Akron, Ohio-based Goodyear said in November is was pursuing alternatives for its chemical business, Dunlop brand and OTR unit, with the aim of raising at least $2 billion. The company named it the “Goodyear Forward” plan.

Goodyear has warned of even greater competition in the tire-making industry, with rival manufacturers ramping up capacity in low-cost countries and aggressively seeking market share. Goodyear’s main competitors globally include Bridgestone Corp., Continental AG and Pirelli & C. SpA.

Goodyear’s shares have fallen 26 per cent this year. Its market value is $3 billion.