In February 1999, Goodyear Tire & Rubber Co. announced it would acquire 10% of Sumitomo Rubber Industries Ltd. (SRI), a deal that gave Goodyear control of Dunlop in North America.
The $936 million transaction also gave SRI a 1.4% stake in Goodyear. In turn, Goodyear gained 10% interest in SRI.
“The Goodyear/SRI deal had been rumored for many months before a memorandum of understanding was reached,” then-MTD Editor Lloyd Stoyer wrote in the March 1999 edition of MTD.
“Top executives of both companies said they are pleased with the deal that involves a series of joint ventures,” Stoyer continued.
“Sam Gibara, Goodyear’s CEO, chairman and president, said Goodyear will get the rights to Dunlop brand tires virtually worldwide, including two plants in the U.S. and eight plants and 350 retail outlets in Europe.
“The arrangement gives Goodyear 75% interest and operating control of Dunlop in both North America and Europe and a 25% interest in Dunlop in Japan and a foot in the door in a market where (Goodyear) has struggled for years.
As part of the deal, Goodyear also secured “majority interest in the two firms’ worldwide technology sharing and purchasing.
“Gibara said Goodyear’s excellent financial position permits the company to pay cash for the deal. He said the joint venture would add $300 million to $360 million to operating profits over the first three years of the agreement.
“Without depending on any other benefits, Gibara said the joint venture would permit Goodyear to recover its entire $936 million investment in about three-and-a-half years.”
Stoyer reported that the Goodyear-SRI deal would add “about $2.5 billion to Goodyear’s annual sales, bringing them to $13.9 million compared to Bridgestone’s $13.5 billon and Michelin’s $12.8 billion.
“Dunlop’s sales in the U.S. are nearly $800,000 a year and sales of the two companies in Europe, where Dunlop is strong in both the OE and replacement tire markets, total about $4 billion annually.”
Several months later, Gibara – at Goodyear’s annual shareholders meeting in Akron, Ohio – said the SRI deal would help Goodyear “regain its position as the world’s largest tire company.”
In an interview with Stoyer that appeared in the August 1999 edition of MTD, Gibara said that Goodyear’s control of the Dunlop brand in North America would give Goodyear dealers “access to a more complete package of tire brands, with the well-known Dunlop brand as the ‘better’ tire in our good-better-best offerings.
“A few dealers have been concerned about how we will integrate Dunlop tires into our line-up," said Gibara. "But in perhaps 95% of all markets there is really little conflict between present Dunlop dealers and our Goodyear dealers.
“By far, the largest number of Dunlop tires have been distributed through our wholesale outlets, while with our Goodyear dealers, we will be concentrating on retail distribution. In the few markets where there will be conflict, we are working to ensure that all dealers will be treated fairly.”
In early-2001, MTD reported that Gibara, who had recently been elected to SRI’s board, said Goodyear and SRI were “interested” in extending their alliance to the rest of Asia.
Two years later, Goodyear reduced its stake in SRI to 1.5% “as part of its ongoing plan to enhance (Goodyear’s) financial flexibility.”
Goodyear sold 20.8 million of its shares in SRI for $83.4 million. SRI purchased 97.6% of those shares.
"Our alliance and partnership with Sumitomo remains strong," said Bob Keegan, who was named Goodyear's CEO and president in January 2003, replacing Gibara. "Our joint ventures are successful."
Goodyear said it expected to take a non-cash charge of $10 million related to the transaction.
In 2015, Goodyear disclosed it had reached an agreement with SRI to dissolve the global alliance between the two companies.
As part of the dissolution agreement, Goodyear retained exclusive rights to sell Dunlop-brand tires in both the consumer and commercial replacement markets of the United States, Canada and Mexico, as well as to non-Japanese vehicle manufacturers in those countries.
In 2023, as part of its Goodyear Forward plan, the company announced it was looking for a buyer for the Dunlop brand, as well as buyers for its OTR tire business and chemical division.
