Goodyear Tire and Rubber Co. of the United States, the world's third-biggest tire maker, has agreed with Sumitomo Rubber Industries Ltd. to participate in a capital and business alliance that will be the largest in the industry, Sumitomo announced Wednesday.
Sumitomo Rubber is the fifth-largest tire producer in the world and would with Goodyear own 22 percent of the world's tire market on estimated sales of 2.3 trillion yen.
That kind of market share would exceed Bridgestone Corp. of Japan and Michelin SA of France, which have shares of about 18 percent each.
Under the arrangement, Goodyear is to acquire 10 percent of Sumitomo Rubber shares while Sumitomo Rubber and leading shareholder Sumitomo Electric Industries Ltd. buy an equivalent amount in Goodyear, Sumitomo Rubber officials said. The two companies will then consolidate tire production and sales operations, with Goodyear taking control of the U.S. and European operations of Sumitomo, which will in turn assume Goodyear's Japanese operations, they said.
On an consolidated basis, Sumitomo Rubber, maker of the Dunlop brand, posted a 5.8 billion yen net profit in the year ending in December 1997, with sales of 613 billion yen.
Goodyear meanwhile posted a $559 million consolidated net profit, also in the year ending in December 1997, on $13.16 billion in sales.