2024 is coming to an end, and in this year, the tire industry has ushered in an unprecedented wave of acquisitions. Many world-renowned tire manufacturers have expanded their business scope and enhanced their market competitiveness through acquisitions. These acquisitions not only involve traditional tire businesses, but also emerging markets such as off-road tires.
Major acquisitions in the tire industry in 2024
In recent years, the tire industry has faced unprecedented changes and challenges. On the one hand, with the rapid development of the global automotive industry, the demand for tires continues to grow; on the other hand, increasingly stringent environmental regulations and diversified consumer demands have also placed higher demands on tire manufacturers. In this context, tire manufacturers have been integrating resources, improving production efficiency, and expanding business areas through acquisitions to respond to market changes.
Titan International, Inc. acquires Carlstar Group LLC.
On February 29, Titan International, Inc., a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products, announced the acquisition of Carlstar Group LLC. for approximately $296 million in a transaction consisting of cash and stock.
Carlstar is a global manufacturer and distributor of specialty tires and wheels for a variety of end-market verticals including outdoor power equipment, power sports, trailers, and small to midsize agricultural and construction equipment. Carlstar operates three manufacturing facilities in the US and one in China. Carlstar also internally manages twelve distribution facilities around the world. Carlstar’s global 2023 revenues were approximately $615 million.
Founded in 1983, Titan International is an American off-road tire manufacturer that has grown gradually through several mergers in recent years. Titan said Carlstar brought significant new customer relationships in multiple channels, including leading wholesale distributors, national retailers, commercial servicing dealers, and OEMs.
In addition, Carlstar added further diversification to Titan’s product portfolio, especially in outdoor power equipment, power sports and high-speed trailers, where Titan did not have a presence.
Yokohama Rubber acquires Goodyear's OTR business
On July 22, The Goodyear Tire & Rubber Company announced that it has signed a definitive agreement to sell its Off-the-Road ("OTR") tire business to The Yokohama Rubber Company, Limited for $905 million in cash.
The transaction is expected to close by early 2025. Goodyear intends to use transaction proceeds to reduce leverage and fund initiatives in connection with the Goodyear Forward transformation plan.
It is reported that Goodyear's OTR business mainly includes mining and engineering tires, with annual sales of approximately $700 million. It has factories in Topeka, Kansas, USA and Tatsuno, Japan.
In its YX2026 plan proposed earlier this year, Yokohama Rubber said the company's global share of the construction and mining machinery tire market is still small, so it will consider mergers and acquisitions as a measure to increase this share.
Goodyear will retain its business providing OTR tires for U.S. military and defense applications. Pursuant to a Product Supply Agreement to be entered into with Yokohama in connection with the closing of the transaction, Goodyear will manufacture certain OTR tires for Yokohama at some of its manufacturing locations for an initial period of up to five years after the closing of the transaction.
Ceat acquires Michelin's Camso brand
In December, Ceat and Michelin have entered into a definitive agreement for Ceat to acquire Camso brand’s Off-Highway construction equipment bias tire and tracks business from Michelin in an all-cash deal valued at about $225 million.
The transaction is expected to be completed within six to nine months and Ceat will again global ownership of the Camso brand along with two manufacturing facilities in Sri Lanka. Ownership of the Camso brand will follow a three-year licensing period.
The Camso brand is an excellent fit with the growth strategy of Ceat’s off-highway tire business. Camso will enable Ceat to enter the track and construction tire segments and give Ceat access to a global customer-base, including over 40 international OEMs and international OHT distributors.
Three major acquisitions around the off-highway tire market
It is not difficult to see that the main acquisitions in the tire industry this year are centered around the off-road tire market. With the acceleration of global infrastructure construction and the rapid development of industries such as mining and construction, the demand for off-road tires continues to grow.
According to industry research reports, the current global market size of OTR exceeds 180 billion yuan, and is expected to grow to approximately 280 billion yuan by 2028.
Chinese tire manufacturers such as Zhongce Rubber, Linglong Tire, Sailun Tire and Aeolus Tire are actively deploying in this market and seizing this market opportunity through acquisitions and expansion of production capacity.
More acquisitions, integration and business expansion
In addition to the above-mentioned acquisitions, there are also acquisitions of non-tire businesses by tire companies. Earlier this year, Michelin acquired Tyrola, Australia's third largest tire e-commerce company.
Tyrola offers a "wide selection of brands" and "over 52,000 SKUs". Customers can then have their tyres fitted at more than 700 fitting centres across Australia and New Zealand.
In May this year, Hankook & Company Group (formerly Hankook Tire Group) spent KRW 1.733 trillion to acquire Hanon Systems, the world’s second-largest automotive thermal and energy management solutions company.
Hanon Systems is considered the world's second-largest company in TMS for electric vehicles, from complete design to C-parts supply. Through the acquisition of Hanon Systems' management rights, Hankook & Company Group will become a provider of crucial technology for the electric vehicle era, including TMS technology and tyres for automobiles.
The wave of acquisitions in the tire industry in 2024 is an important measure for tire manufacturers to respond to market changes and achieve strategic transformation. Through acquisitions, tire manufacturers can integrate resources, expand business areas, and enhance international competitiveness.
At the same time, emerging markets also provide tire manufacturers with broad development opportunities. In the future, with the continued development of the global automotive industry and increasingly stringent environmental regulations, the tire industry will continue to face both challenges and opportunities. Tire manufacturers need to continue to innovate, improve product quality and service levels to win more trust and support from consumers.
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