Goodyear Tire & Rubber Co. has completed the previously announced sale of its Latin American farm tire business to Titan Tire Corp., a subsidiary of Titan International Inc.
Goodyear completed the sale for approximately $98.6 million, subject to post-closing conditions and adjustments, for the Latin American business, which includes the company’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,” says Richard Kramer, Goodyear chairman, CEO and president. “Our Latin American farm tire operations have been very successful for many decades."
Total revenue from the Sao Paulo plant is running at approximately $250 million annually, which includes approximately $125 million of farm product sales and approximately $125 million non-agriculture product that Titan will build for Goodyear under supply agreements.
“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,” says Maurice Taylor, chairman and CEO of Titan. "This expansion into Latin America supports our global vision of becoming the world’s premier farm tire manufacturer.
The European portion of the transaction has not yet been completed. Assuming the European portion of the transaction is completed, Goodyear’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.