The Yokohama Rubber Co., Ltd. has announced that The Yokohama Rubber Co., Ltd. and Continental Aktiengesellschaft (headquartered in Hanover, Germany with Dr. Stephan Kessel, Chairman of the Board) signed LOI (Letter Of Intent) today in order to do worldwide tire business activities more closely in the future.

As an essential element of this Letter Of Intent, a 50/50 joint venture is to be set up in Japan by the end of current year. The JV will focus on Japanese automakers in bundling the joint activities of the two companies for the worldwide benefit of these original equipment customers.

In the LOI the two companies also are committed on stronger cooperation in tire production, above all in the NAFTA area, and on technological collaboration. Yokohama will help Continental support in expansion of the latter company? replacement tire business in the Japanese market. The two companies will look for synergies, including in the area of purchasing.

In signing the letter, both companies noted that two companies are to strengthen worldwide competitiveness and to offer their products worldwide to the ever more globally active automotive industry. Both companies expect to profit particularly in the NAFTA area from working together.

The details of the planned alliance will be finalized in the course of the latter half of the year and lead, by the end of 2001, to the aforementioned JV in Japan as well as to other cooperative agreements. The two companies already work together.

Continental Aktiengesellschaft is headquartered in Hanover, Germany and do the business of tire, automotive systems and ContiTech. Consolidated annual income is 10.1 billion euro, the tire of which is 5.4 billion euro with 24 tire plants in 16 countries worldwide, employing approx. 63,000 people.

Yokohama Rubber Co., Ltd. is headquartered in Tokyo with business activities of tire, MB (Multiple Business) and sporting goods with annual income 388 billion yen (tire 271 billion yen) and 9 tire plants in 4 countries worldwide with employment of 13,300.