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Wednesday, January 19, 2022

Japan tyremaker shares drop on dissolved Goodyear alliance

Shares in Japanese tyremaker Sumitomo Rubber dropped more than five percent Friday morning after US partner Goodyear said it was dissolving the firms’ longstanding alliance over allegations of anti-competitive behaviour.

The Tokyo-listed stock finished the morning session down 5.39 percent at 1,314 yen ($13) after Goodyear’s chief financial officer said Thursday that Sumitomo was notified last month of its demand to end their 15-year tie-up.

“We have learned that (Sumitomo) has engaged in anti-competitive conduct in violation of applicable antitrust law,” Goodyear CFO Laura Thompson said during the company’s fourth-quarter earnings call.

“We concluded that warrants the dissolution of this global alliance.”

In response, Sumitomo on Friday said it had accepted the decision, but denied the allegations.

“There is a difference between the views held by Goodyear and us,” Sumitomo said in a statement, adding that it would “move to resolve the issues”.

A Sumitomo spokesperson could not be immediately reached.

The moves come as the US Justice Department hit Japanese tyre and rubber parts giant Bridgestone with a $425 million fine Thursday for conspiring to fix the prices of rubber parts used in US-made automobiles.

The department said Bridgestone pleaded guilty to one felony charge in the federal district court, and agreed to the fine.

It was unclear if the allegations against Sumitomo were related to the Bridgestone case.

Under their 1999 alliance, Goodyear owns 75 percent and Sumitomo owns the remaining portion of both Goodyear Dunlop Tire Europe and Goodyear Dunlop Tire North America.

Under the joint ventures, Goodyear and Sumitomo cooperate in mutually supplying tyres under the both companies’ brand names.

Goodyear filed an appeal for arbitration with the Paris-based International Chamber of Commerce last month to decide on conditions and other details for dissolving the alliance.

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