Goodyear Sells Dunlop to Sumitomo for $701 Million
Goodyear is looking to streamline its business, with the sale of the tyre brand Dunlop being one vehicle to do this
Goodyear has inked a deal to sell its tyre brand Dunlop to the Japanese brand Sumitomo, with the sale reportedly being worth around $701 million.
The sale includes the entire Dunlop brand, intellectual property and “intangible assets necessary for operations”, with the deal covering Europe, North America and Oceania.
Dunlop and Sumitomo have a history that goes back quite some time, so the sale of the tyre brand to the Japanese company was isn’t a huge surprise. The $701 million deal is part of Goodyear’s plan to streamline its operations, which it laid out in its ‘Goodyear Forward’ transformation plan.
As well as the purchase price paid to acquire the brand, Sumitomo will also pay a “Transition Fee” and while it sounds like a lock, stock, and barrel purchase, in Europe at least, Dunlop will continue to manufacture, sell and distribute Dunlop branded consumer tyres until at least December 31, 2025. Furthermore, Dunlop will still supply certain branded tyres to Sumitomo for the European market for a five-year period, with quantities of 4.5 million tyres per year required to oblige the contract.
Speaking about the deal, Mark Stewart, Goodyear Chief Executive Officer and President, said:
"This is another important milestone as we continue to execute against our Goodyear Forward transformation plan. We are optimising our portfolio and reducing leverage to drive sustainable and substantial shareholder value creation … Not only does the transaction deliver significant value for our shareholders, it better positions Goodyear to enhance our focus on the growth of our core brands.
"Our team conducted a comprehensive process focused on maximising value for Goodyear through a divestment of our Dunlop Brand, and we are very pleased with the outcome achieved," said Christina Zamarro, Executive Vice President and Chief Financial Officer. "We are committed to working closely with SRI to ensure a smooth transition for customers of the Dunlop Brand."
The deal will no have to go through regulatory checks, although it is thought that it should be rubber-stamped later this year.
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Simon (AKA Toad) has been working within the motorcycle industry for more than twelve years, and a member of the motorcyclist family since birth. Growing up around British-built single and twins, it was inevitable that a life on two wheels was on the cards, from a very early age!
