Goodyear Tire & Rubber Company has announced that it has signed a definitive agreement to sell the Dunlop brand, comprising trademarks and intangible assets necessary for operations of the brand business in Europe, North America and Oceania for consumer, commercial and other specialty tyres, together with certain associated intellectual property, to Sumitomo Rubber Industries (SRI).
The sale of the Dunlop Brand follows a previously announced strategic review of the brand in connection with the company’s transformation plan. Pursuant to the transaction terms, SRI will pay Goodyear cash proceeds at closing of approximately US$701 million for the transfer of the Dunlop Brand across the relevant geographies.
“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,” said Mark Stewart, Goodyear CEO/President. “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.”
The transaction is subject to regulatory approvals, other customary closing conditions and consultations and is expected to close by mid-2025. Goodyear intends to use transaction proceeds to reduce leverage and fund initiatives.
Goodyear will receive approximately US$701 million of cash proceeds at closing from SRI, across three transaction components:
(a) SRI will pay Goodyear US$526 million for the Dunlop Brand and certain associated intellectual property;
(b) SRI will pay Goodyear a US$105 million Transition Fee for support in transitioning the Dunlop Brand and associated intellectual property, and facilitating the transition of Dunlop customers, to SRI, including planning matters and support of distribution and logistics through the end of the Transition Offtake Agreement; and
(c) SRI will purchase existing Dunlop consumer tire inventory at an agreed markup. The exact inventory value to be purchased will finalized between signing and closing, however Goodyear estimates proceeds to be approximately US$70 million, subject to a true-up.
In addition, under the terms of the agreement, Goodyear will continue to manufacture, sell and distribute Dunlop branded consumer tires in Europe through at least December 31, 2025.
Goodyear will pay a royalty to SRI during this period on Dunlop sales but will otherwise retain all profits from these sales. The term will automatically extend for an additional year, through December 31, 2026, unless the parties mutually agree to an earlier termination. This transition period is intended to give SRI time to scale its organisation in Europe to effectively absorb the Dunlop Brand and maintain service levels for existing Dunlop customers.
Following the completion of the agreement, Goodyear will supply certain Dunlop branded tyres to SRI in Europe for a five-year period. The agreement stipulates minimum purchase quantities of 4.5 million tyres/year for the five-year term, on a take-or-pay basis. SRI may terminate it early after the third year, with 12 months’ notice, subject to payment of a termination fee.
Goodyear will license 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.
Dunlop consumer tyre sales totalled US$532 million in 2023. Dunlop commercial tyre sales totalled US$201 million in the same period. Other specialty Dunlop tyre sales (excluding motorcycle) totalled US$22 million.
Goodyear will retain its rights to the Dunlop trademarks for its motorcycle tyre businesses in Europe and Oceania.