Yokohama Rubber Co. Ltd. and Kumho Tire Co. Inc. signed a memorandum of understanding on Nov. 29 to start discussions of technology exchanges and a capital alliance premised on cross-shareholdings.
Yokohama says the two companies aim to increase their competitiveness and enhance their future growth potential in the global tire market by sharing R&D resources and making more effective use of them through joint research and development on tires and related technologies.
The two companies also plan to enter into a capital alliance based on cross-shareholdings. Yokohama Rubber and Kumho will start discussions on the details of the alliance (including methods for obtaining each other's shares, the size of shareholdings, and the timing of acquisition) with the aim of signing a legally binding contract as early as possible, according to Yokohama.
Kumho Tire, established in 1960, is headquartered in Gwangju, South Korea. The company is a core member of the Kumho Asiana Group, which also includes Asiana Airlines. Kumho Tire recorded consolidated net sales of 4,070.6 billion ($3.8 billion) won in fiscal 2012. The company has eight tire plants in South Korea, China, and Vietnam and employs about 11,000 people.
Yokohama Rubber, founded in 1917, is engaged in the manufacture and sale of tires and a variety of products in its multiple business operations. In fiscal 2012 (ended Dec. 31, 2012), the company recorded consolidated net sales of 559.7 billion yen ($7 billion), with tires accounting for 444.6 billion yen (nearly $5.6 billion) of the total. Yokohama operates 12 tire plants (not including those currently under construction) in seven countries around the world and employs about 20,000 people globally.