Titan could reap $400 million in sales from Goodyear deal

ERJ staff report (TB)

Quincy, Illinois -- Titan International Inc.'s pending agreement to buy Goodyear's European and Latin American farm tyre businesses could boost Titan's annual sales by $400 million or more, according to Titan Chairman and CEO Maurice Taylor Jr.

he $130 million deal, subject to customary closing conditions and regulatory approvals, would add about 1,000 employees at plants in Sao Paulo, Brazil, and Amiens, France, to Titan's rosters, according to available data on those units.

Goodyear has been seeking a buyer for these assets since May 2009. Titan offered to buy the European business in September 2009 and has been in talks with Goodyear since.

“These acquisitions support our global vision of becoming the premier farm tyre manufacturer in the world,” Mr. Taylor said. “In the past these assets have had sales in excess of $400 million annually. Going forward, my expectations are to increase the sales in a short period of time.”

Completing the deal in France still depends on Goodyear's completing a social plan related to the previously announced discontinuation of consumer tyre production at the Amiens plant and required consultation with the local works council. That plan called for eliminating about two-thirds of the 1,200 jobs active at the factory in May 2009.

Upon completion of this action and approvals, the transaction will include the Amiens North plant, property, equipment and inventories, Titan said.

The deal includes a licensing agreement that will allow Titan to make and sell Goodyear-brand farm tyres in Europe, Africa, Eastern Europe, Russia and Latin America. Titan bought Goodyear's North American farm tyre business, including a plant in Freeport, Ill., in 2005.

The Latin American portion of the transaction includes Goodyear´s Sao Paulo, Brazil manufacturing plant, property, equipment and inventories.

Titan is on target to generate $850 million to $900 million in sales this year and up to $1.1 billion next year, without this acquisition, Mr. Taylor said recently. Titan generates about 10 percent of its annual sales from export business, according to the firm's financial statements.

Mr. Taylor will discuss the deal with investors and analysts in a conference call Dec. 15.

From Tire Business (A Crain publication)