Tyre company Goodyear has announced it will sell its Dunlop brand to Japan’s Sumitomo Rubber Industries (SRI) for USD701 million (about RM3.2 billion) in cash as part of its ‘Goodyear Forward’ transformation plan.
In an official release, Goodyear said the sale includes trademarks and intangible assets necessary for operations of Dunlop in Europe, North America and Oceania for consumer, commercial and other specialty tyres.
The sum that SRI will pay Goodyear includes three transaction components, including USD526 million (RM2.4 billion) for the Dunlop brand and certain associated intellectual property, a USD105 million (RM473 million) transition fee as well as approximately USD70 million (RM315 million) to purchase existing Dunlop tyre inventory.
Additionally, under the terms of a transition licence agreement (TLA), Goodyear will continue to manufacture, sell and distribute Dunlop-branded consumer tyres in Europe through at least December 31, 2025, with an extension to the end of 2026 being automatically activated unless both parties mutually agree to an earlier termination. During this period, Goodyear will pay royalties to SRI but will otherwise retain all profits from these sales.
Following the completion of the TLA, Goodyear will supply certain Dunlop-branded tyres to SRI in Europe for a five-year period under the terms of a transition offtake agreement (TOA). This stipulates minimum purchase quantities of 4.5 million tyres per year on a take-or-pay basis.
SRI has the option of terminating the TOA early after the third year, with twelve months’ notice, subject to payment of a termination fee. The TOA provides Goodyear with an agreed markup to total costs (including raw materials) for each tyre sold.
Another term of the transaction is Goodyear will licence back the Dunlop trademarks from SRI for commercial truck tyres in Europe on a long-term basis, subject to a royalty on sales. Goodyear can terminate this licensing agreement at any time during the licensing period.
The post Goodyear announces sale of Dunlop brand to Japan’s Sumitomo Rubber Industries for USD701 million appeared first on Paul Tan's Automotive News.
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