Titan completes purchase of Goodyear's farm tire division
Titan International Inc. has completed its acquistion of Goodyear Tire & Rubber Co.'s farm tire division for $100 million. The transaction includes Goodyear's farm tire plant in Freeport, Ill., and inventories. Titan also gains exclusive rights to build and market Goodyear brand farm tires throughout North America.
"In 2006, this acquisition is expected to increase Titan sales by approximately $250 million," says Titan Chairman and CEO Morry Taylor.
Jon Rich, president of Goodyear's North American Tire unit, says the sale will allow Goodyear "to increase our focus on our core consumer and commercial tire businesses."
Unionized employees at the Freeport factory approved a new labor contract for the facility last week, which was the final barrier to finishing the transaction.
According to Goodyear's current contract with the United Steelworkers, Titan had to forge a new contract with the union before it could buy the Freeport plant.
Titan originally announced its intention to buy Goodyear's farm tire division in February 2005.
Goodyear expects to charge a loss of $65 million on the sale, including charges for curtailment of employee pension and post-retirement medical plans.
"On an on-going basis, the sale will reduce revenue in Goodyear's North American Tire segment by about $200 million annually," say Goodyear officials.
"But it will eliminate the need for further investment in the farm tire business."
Titan also gets control of the Kelly farm tire brand as part of the deal.