Toyo Tire Corp.’s President and CEO Takashi Shimizu and its Board of Directors resolved to sell a portion of its stock holdings in Bridgestone Corporation, with whom Toyo Tire maintains business and capital alliances.
The company will sell 50% of its holdings of over 3 million shares worth 4,000 million yen on the Tokyo Stock Exchange. The sale is expected to be completed by Feb. 29, 2020.
Under a 2008 framework of business and capital alliances, Toyo Tire holds approximately 3.9 common shares of Bridgestone (0.51% of the number of shares outstanding) and Bridgestone holds 10 million common shares of Toyo Tire (6.49% of the number of shares outstanding). In the 11 years since the alliances were formed, the two companies have synergised through the effective use of each other’s strengths and management resources in various areas, including the “development of tire production technology” and “procurement of raw and other materials and equipment,” thus successfully enhancing their respective corporate value and establishing a stable relationship with mutual trust, a press release states.
With the capital alliance between the two companies playing a role in establishing their relationship, a requirement to discuss and pursue a business alliance, and a policy to reduce cross-shareholdings between listed companies was presented in the revised Japan Corporate Governance Code, which entered into law on June 1, 2018. The two companies have discussed at length and agreed that each party will sell 50% of its stock holdings in the other party, the release said. The business and capital alliances between the two companies will remain intact.