Akron-based The Goodyear Tire & Rubber Co. and Nashville-based Bridgestone Americas Inc. are forming TireHub LLC, a tire distribution joint venture aimed at U.S. tire dealers and retailers.
TireHub, which will be based in Atlanta and run by an independent management team, is a 50-50 joint venture between Goodyear and Bridgestone that will offer a comprehensive range of passenger and light truck tires with an emphasis on larger-rim diameter premium tires. It will operate through a single sales force and online ordering portal that integrates with dealers' point-of-sale systems.
In a filing with the U.S. Securities and Exchange Commission, Goodyear said TireHub will combine Goodyear's company-owned wholesale distribution network and Bridgestone’s Tire Wholesale Warehouse, giving it an initial sales volume of 10 million tires a year through more than 80 distribution centers and warehouses across the country.
The filing estimated the value of the joint venture to be $600 million and said the companies expected to split an estimated startup cost of $40 million. The transaction is subject to customary approvals and is expected to close mid-year.
"It's critical for U.S. tire dealers and retailers to be able to get the right tires on time to meet the needs and expectations of their customers,” TJ Higgins, president, integrated consumer tire group, U.S. and Canada, Bridgestone Americas, said in a statement. “TireHub will help position dealers to win in today's dynamic and increasingly complex environment by giving them much needed access to a deeper and broader range of passenger and light truck tires from Bridgestone."
"With the ability to deliver the full portfolio of Goodyear products and a dedicated focus on driving logistics and customer service excellence, TireHub creates a winning proposition for us, our customers, Goodyear's company-owned retail outlets and consumers, whose expectations and shopping patterns continue to evolve," Goodyear Americas President Steve McClellan said in a statement.
TireHub is expected to help Goodyear and Bridgestone customers manage growing complexity in the tire business, driven by SKU proliferation. The new distributor will provide on-demand access to the full array of products from both companies, which is critical for their customers, who typically have limited inventory space at their locations.