4 Mar 2005
Quincy Illinois--A Titan International Inc. subsidiary has signed a definitive agreement to buy Goodyear´s North American farm tyre business for about $100 million, the Quincy-based company said.
Titan Tire Corp. will buy the assets--including the manufacturing plant, property and equipment plus inventories--of Goodyear's farm tyre business. The deal also includes a licensing agreement for Titan to manufacture and sell Goodyear-branded farm tyres.
The deal is pending government approval and Titan's ability to reach an agreement with the United Steelworkers of America membership at the Goodyear plant in Freeport, Illinois Titan said its current senior lenders have agreed to fund the transaction, and Titan plans to raise $125 million in long-term debt or complete another convertible bond offer to reduce the senior debt. The acquisition will add about $210 million in revenue to Titan's overall sales.
Goodyear said that while the deal would reduce its revenue by about $200 million annually, it also would improve North American Tire's earnings and eliminate the need for further investments in the farm business.
With the agreement, Titan will offer two farm brands--Titan and Goodyear--with the latter positioned as the premium brand. Titan will decide by June whether the combined tyre group will be headquartered in Des Moines, Iowa, or Freeport.
"Combining Titan's focused engineering expertise in addressing the needs of the farming community with the power of the Goodyear name creates an undeniable advantage for the American farmer," said Maurice Taylor Jr., Titan president and CEO.
Press release from Titan
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