(Reuters) - Goodyear Tire & Rubber will sell its Off-the-Road equipment tire business to Japan's Yokohama Rubber for $905 million in cash, it said on Monday, as part of a drive to streamline its business.
Goodyear last year announced plans to cut costs and slim down its portfolio of businesses, including its chemical unit, its Dunlop brand and the Off-the-Road unit, a strategic review aimed at delivering more than $2 billion in gross proceeds.
The tire maker in January named a former Stellantis (NYSE:STLA) executive as its next chief, after reports it was under pressure from activist shareholder Elliott Investment Management L.P. to do so.
The Off-the-Road business makes tires for industries such as mining and construction. The deal is expected to close by early 2025, Goodyear said in a statement.
Goodyear said it expects to make certain Off-the-Road tires for Yokohama Rubber at some of its manufacturing sites for an initial period of up to five years after the closing of the deal.
With the acquisition, Yokohama Rubber aims to strengthen its product portfolio and boost its line-up of tires in non-agricultural segments, the Japanese company said in a separate statement.
Yokohama Rubber said it will acquire all shares of Nippon Giant Tire, which operates an Off-the-Road plant in Japan's Hyogo prefecture and Goodyear Earthmover in Australia, as well as other assets worldwide.
Evercore advised Goodyear on the deal.