Toyo Tires ends capital, business alliance with Mitsubishi

Itami, Japan – Toyo Tire Corp. is set to terminate its capital and business alliance with Mitsubishi Corp. with a planned share buyback, ending a partnership established to help rebuild the tire & rubber group.

In a 7 Aug statement, Toyo said it entered an agreement with Mitsubishi in 2018 to collaborate primarily to strengthen its sales and technological capabilities and enhance its resources.

Mitsubishi also supported the tire maker through personnel secondments, while funds raised through a third-party share allotment were used to expand production capacity.

“Both companies have concluded that the initial objectives of the capital and business alliance have been accomplished,” said Toyo in its statement.

The tire & rubber group added that it has now established a management structure capable of pursuing “autonomous and sustainable growth.”

The alliance will terminate once Toyo Tire executes its planned acquisition of treasury shares, which will reduce Mitsubishi’s ownership below the threshold specified in the agreement.

The termination is scheduled to take effect 10 Aug.

In a separate announcement, Toyo said it plans to acquire up to 32 million of its own shares for up to Yen115 billion (€630 million) through an off-auction ToSTNeT-3 transaction.

Mitsubishi currently holds just over 30 million Toyo Tire shares, equivalent to 20.01% of the company’s issued shares excluding treasury stock, making it Toyo Tire’s largest shareholder.

Following the sale, the Master Trust Bank of Japan is expected to become Toyo Tire’s largest shareholder, with a 16.6% stake in the group.

Toyo Tire and Mitsubishi said they “will maintain a good relationship to continue advancing their business activities going forward.”