(Adds details from news conference)

TOKYO, May 16 (Reuters) - Japan's Bridgestone Corp (5108.T: Quote, Profile, Research) said on Friday it was forming a strategic alliance with rival Toyo Tire & Rubber Co (5105.T: Quote, Profile, Research), including capital ties, aimed at coping with high materials prices and intensifying competition.

The two companies plan to team up in developing advanced tyre technology and procuring raw materials. They will also use each other's production facilities.

They also said they would take stakes in each other worth 8 billion yen ($76 million).

Toyo Tire will issue new shares to give Bridgestone an 8.72 percent holding while Bridgestone will sell treasury stock to Toyo Tire to give it a 0.48 percent stake.

"The most pressing reason for this tie-up has been the rise in raw materials prices," Bridgestone Chief Executive Shoshi Arakawa told a news conference.

Tokyo rubber prices, the benchmark for the industry, have climbed more than 70 percent since late 2006 on robust demand from China and overall strength in the global commodities markets.

The growth of competitors offering lower prices from emerging economies such as China, South Korea, and India was also a major factor that prompted the alliance, Arakawa said, adding that Bridgestone had approached Toyo Tire about a tie-up in January.

But he also said Bridgestone had no plans to further increase its stake in Toyo Tire.

Bridgestone vies with France's Michelin (MICP.PA: Quote, Profile, Research) for the top spot in the global tyre market. (Reporting by Nobuhiro Kubo and Edwina Gibbs)