In line with its transformation programme, tyre firm Goodyear Tire & RubberCompany is selling most ofits chemical business, Goodyear Chemical, to Gemspring Capital Management in a deal valued at around US$650 million. The transaction is subject to regulatory approval, as well as other customary closing conditions.
As part of the agreement, which is expected to close by the end ofthe year, Gemspring will take over production facilities located in Houston and Beaumont, Texas, and an R&D facility in Akron, Ohio. Additionally, the transaction provides for a long-term supply agreement.
Goodyear Chemical is a producer of synthetic rubber, offering a broad product portfolio in North America and serving the automotive aftermarket as well as the consumer and industrial end markets.
Goodyear adds it will retail its chemical facilities in Niagara Falls, NY, and Bayport, Texas and rights to all products produced at these facilities.
The transaction is in line with the company’s Goodyear Forward program to achieve record quarterly savings and at least US$2 billion in asset sales, as well as to reduce leverage and fund initiatives.
The initiative was announced on the heels of pressure from activist investor Elliott Management which had publicly called on Goodyear to improve its performance. At the time, Elliot said Goodyear had worse profit margins than its peers, and it publicly recommended that the company sell some or all of its more than 1,000 retail stores.
Last July sold its Off-The-Road tyre business to Japanese tyre maker Yokohama for US$905 million. In January, it sold the Dunlop tyre brand to Sumitomo Rubber Industries Ltd. for an estimated US$701 million.
“With the sale of our chemical business, we continue to demonstrate our commitment to optimising our portfolio and creating shareholder value,” said Goodyear CEO Mark Stewart.