What is in this article?:
Bridgestone closed the Firestone deal in March 1998, beating out its European rivals. The makeup of the global tire industry would never be the same, as one by one competitors followed with their own acquisitions and mergers.
’13 Cadillac ATS fitted with Bridgestone Potenza runflat tires.
TOKYO – Twenty-five years ago this month, Bridgestone took a first step toward becoming a truly global company, and eventually the industry leader, when it surprised the markets by spending $1.2 billion to acquire a controlling stake in the tire operations of Firestone Tire & Rubber.
That decision sparked a series of events that would play out over the decade, profoundly affecting not only the Japanese company but the entire tire industry as well.
On Feb. 18, when Bridgestone reveals its fiscal-2012 revenues, it is expected to still rank as the world’s No.1 tire and rubber company and, for the second-consecutive year, Japan’s most-profitable auto supplier; quite a feat after traveling such a rocky road.
Had the initial Firestone deal gone through smoothly, which it did not, Bridgestone, whose roots trace back to Kurume, a city on Japan’s southernmost island of Kyushu, would have picked up 19 plants including five in North America and six in Europe.
Its bid, made on Feb. 16, 1988, was countered three weeks later by a joint $1.8 billion tender by Michelin and Pirelli for all of Firestone including its North American tire retail chain and lucrative non-tire businesses focusing on synthetic rubber and roofing materials.
Analysts thought the bidding was over and that the French-Italian connection had succeeded in blocking Bridgestone’s entry into the European market and slowing its advance into the Americas.
At the time, Bridgestone, which produced its first automobile tire in 1931, owned a single plant in North America, a medium-size truck-tire facility, and former Firestone factory, in LaVergne, TN, and no plants in Europe.
Surprising the markets again, Bridgestone closed the Firestone deal on March 18, raising the ante to $2.6 billion or $80 a share, up from less than $30 a share in mid-February. The makeup of the tire industry would never be the same, as one by one competitors followed with their own acquisitions and mergers.
First among them were Pirelli and Michelin in 1988. Pirelli bought Armstrong Rubber and Michelin entered into a joint venture with Okamoto Industries.