May 23, 2008
Bridgestone and Toyo Buy Into Each Other as Part of a Formal Alliance
NASHVILLE, TN & TOKYO – Bridgestone Corp. and Toyo Tire & Rubber Co. Ltd. have entered into a "business and capital alliance." Toyo will issue 20 million shares of new ordinary stock and allocate it to Bridgestone, according to Modern Tire Dealer magazine. That will give Bridgestone 8.72 percent of all outstanding stock, including this issue. Bridgestone will allocate 3.9 million shares of its treasury stocks (0.48 percent of issued stocks) to Toyo Corp.
The Japanese competitors "agreed to pursue consultation in business alliances" as well.
Bridgestone and Toyo outlined the business alliances as follows:
1. Production-technology development: "To study advanced production technology, including co-development of new production methodology and machineries."
2. Procurement of raw materials, other materials, and equipment: "To study more competitive method of procurement by utilizing the supply and procurement capacities of Toyo and Bridgestone."
3. Cross production between Bridgestone and Toyo: "To seek ... synergies in economy of scale in production, merits in distributions, and utilization of spare production capacities."
4. Logistics: "To seek for cooperation in logistics at global level."
5. Business other than tires: "To study possible synergies in common business areas other than tires."
The parties added that the business alliances will be discussed and decided upon more specifically at a later date.