Bridgestone Acquires Firestone's Tire Assets
Bridgestone Tire, a Japanese company, lacking a source of retail distribution in the United States, approached its competitor, Firestone, to create a JV whose formation involved two stages. In the first stage, Firestone, which consisted of a tire manufacturing and distribution division and a diversified rubber products division, agreed to transfer its tire manufacturing operations into a subsidiary. This subsidiary was owned and operated by Firestone's worldwide tire business. In the second stage, Firestone sold three-fourths of its equity in the tire subsidiary to Bridgestone, making the subsidiary a JV corporation. Firestone received $1.25 billion in cash, $750 million from Bridgestone, and $500 million from the JV. Firestone also retained 100% ownership in the diversified products division and 25% of the tire JV corporation. For its investment, Bridgestone acquired a 75% ownership interest in a worldwide tire manufacturing and distribution system.
Case Study
-Why do you believe Bridgestone chose to invest in Firestone rather than pursue another option?

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The Answer of Bridgestone Acquires Firestone's Tire Assets
Bridgestone Tire, a Japanese company, lacking a source of retail distribution in the United States, approached its competitor, Firestone, to create a JV whose formation involved two stages. In the first stage, Firestone, which consisted of a tire manufacturing and distribution division and a diversified rubber products division, agreed to transfer its tire manufacturing operations into a subsidiary. This subsidiary was owned and operated by Firestone's worldwide tire business. In the second stage, Firestone sold three-fourths of its equity in the tire subsidiary to Bridgestone, making the subsidiary a JV corporation. Firestone received $1.25 billion in cash, $750 million from Bridgestone, and $500 million from the JV. Firestone also retained 100% ownership in the diversified products division and 25% of the tire JV corporation. For its investment, Bridgestone acquired a 75% ownership interest in a worldwide tire manufacturing and distribution system.
Case Study
-Why do you believe Bridgestone chose to invest in Firestone rather than pursue another option?