ABSTRACT
This chapter explains how the global tyres sector transformed from one filled with multiple, disparate players to one where five companies easily account for over 50 percent of the value of this US$187.2 billion industry. The fact that it bore witness to one of the fiercest takeover battles in modern corporate history makes it eminently suited to explain the M&A wave that swept global markets in the 1980s. In strategies reminiscent of their automaker clients’, tyre makers are also exerting pressure on their rubber suppliers with ever-increasing demands for quality, support and discounts. In retaliation, the scores of rubber suppliers occupying this once near perfectly competitive market are starting to merge and gain much needed economies of scale and scope. Given time, they could gain the power to resist tyre maker demands.
