Newspaper article THE JOURNAL RECORD

Goodyear, Sumitomo Enter Deal

Newspaper article THE JOURNAL RECORD

Goodyear, Sumitomo Enter Deal

Article excerpt

TOKYO (Bloomberg) -- Goodyear Tire & Rubber and Sumitomo Rubber Industries will combine their worldwide operations, creating the world's largest tire maker with sales of $15.5 billion.

Goodyear, the biggest U.S. tiremaker, will be the dominant partner, controlling combined operations in Europe and the United States, officials said Wednesday. Sumitomo Rubber will control Japanese operations.

The venture stops short of a merger, though the companies will exchange about $110 million of stock, equivalent to 10 percent of Sumitomo or 1.4 percent of Goodyear. The two companies will leapfrog Michelin and Bridgestone, the No. 1 and 2 tire makers, in terms of sales. The alliance will allow them to cut costs by eliminating jobs and cutting the prices or raw materials. Suppliers to the auto industry are seeking to extend their worldwide presence as carmakers such as DaimlerChrysler and Ford expand. "There will be more alliances in the tire industry," said Olivier Pouteau, an analyst at CPR Finance, a Paris brokerage. …

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