Bridgestone Corp. and Toyo Tire & Rubber Co. have formed an alliance to help them deal with "unprecedented changes in the business environment," including skyrocketing raw material costs.

The two companies agreed to pursue consultation in business alliances and entered into a "business and capital alliance agreement."

Under the alliance, the two companies will work together in such areas as studying advanced production technology (including co-development of new production methodology and machines); procurement of raw materials; looking for synergies in economy of scale and logistics; and studying possible synergies in common business areas other than tires.

Toyo will issue 20 million shares of new ordinary stock and allocate it to Bridgestone. That will give Bridgestone 8.72 percent of all outstanding stock, including this issue.

Bridgestone will allocate 3.9 million shares of its treasury stocks (0.48 percent of issued stocks) to Toyo Corp.