An 11-year-old alliance between Toyo Tire Corp. and Bridgestone Corp. will continue, but the companies have agreed each will sell 50% of the stock it holds in the other company.

For Toyo, that means selling 1,946,602 shares of Bridgestone stock on the Tokyo Stock Exchange. The company expects to gain 4 billion yen from the sale, which will be complete by Feb. 29, 2020.

According to Toyo, Bridgestone holds 10 million shares of Toyo stock, which represents 6.49% of the total outstanding shares. Toyo's hold of not quite 3.9 million shares of Bridgestone represent 0.51% of Bridgestone's overall outstanding shares.)

In 2008 when the two Japanese tiremakers announced their "business and capital alliance," they said in a joint announcement, "In order for Bridgestone and Toyo to discuss and pursue business alliances under a stable relationship with mutual trust, the two companies decided to establish a capital alliance."

Here are the five issues Toyo and Bridgestone wanted to address:

  • Production-technology development,
  • Procurement of raw materials, other materials and equipment,
  • Cross production between Bridgestone and Toyo,
  • Logistics, and
  • Business outside of tires.

In Toyo's announcement of the share sale, it said," the two companies have synergized through the effective use of each other's strengths and management resources in various areas, including the development of tire production technology and procurement of raw and other materials and equipment, thus successfully enhancing their respective corporate value and establishing a stable relationship with mutual trust....

"The business and capital alliances between the two companies will remain intact. Amid dramatic ongoing changes in the operating environment for tire manufacturers, the two companies will continue to advance their partnership over the mid- and long-term, in order to sustain enhancement of corporate value."

Toyo says it is still evaluating the impact of the stock sale on its earnings forecast for the year. Bridgestone so far hasn't published information about the sale on its website.

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