Tire industry analyst John Healy says Goodyear Tire & Rubber Co.’s sale of the Dunlop brand represents “continued progress” for the Akron, Ohio-based tiremaker.
On Jan. 7, Goodyear announced it entered into a definitive agreement to sell the Dunlop brand to Sumitomo Rubber Industries Ltd. (SRI) for a total of $701 million.
The deal includes trademarks and “intangible assets necessary for the operations of the brand business in Europe, North America and Oceania,” according to a statement from Goodyear. It is expected to close by the middle of 2025.
SRI’s acquisition of Dunlop also provides for off-take, licensing and “other arrangements,” according to Goodyear officials.
“A year-plus ago, (Goodyear) established some of these initiatives toward exiting certain business lines” as part of the Goodyear Forward plan, Healy told MTD.
Those assets included the Dunlop brand, Goodyear’s OTR tire business and the tiremaker’s chemical division.
Last summer, Goodyear announced it would sell its OTR tire unit to Yokohama Rubber Co. Ltd. in a $905 million cash deal that’s expected to close in early-2025.
“We’ve now entered into what I would say is the second phase of (Goodyear’s) assets being monetized, if you will,” said Healy, who also writes MTD’s monthly Your Marketplace column.
The Dunlop and OTR business unit spin-offs “also keep with them an element of business activity and support, where Goodyear should be able to extract some unit economics for the next few years.
“What it shows to me is there are buyers out there for these assets, (Goodyear has) executed on the timeline of the initiatives and I think they’re tracking quite well on the dollar value they’ve promised the investment community.”
Commenting on Dunlop's positioning within the market, Healy told MTD he believes “the awareness and presence and popularity of Dunlop is probably much stronger in Europe. To me, it seems like the interest in SRI to acquire the business is probably about its presence in Europe.
“I think Dunlop, for a number of reasons, has less of a presence in the U.S. and the value for SRI is in growing (Dunlop) in markets like Europe, Middle East and Africa and capitalizing on where its brand cache has been stronger at this point. Dunlop is still a pretty sizeable entity.
“I think Dunlop is additive to (SRI’s) business and helps them on a global stage. I think they’re going to probably try to resurrect it a little bit (globally) and probably a little but here in the Americas.”
When asked about the timeline of Goodyear selling its chemical division, Healy said, “I think the plan is to hopefully get all these transactions completed before the end of the year. I’m hopeful we’ll hear something there - maybe in the first half of the year. I think they’re on-pace to deliver.
“I think what’s complicating these transactions is that these aren’t ‘sell-it-today, gone-tomorrow’ things. It seems there are workings that need to be established in terms of presence and support and access to molds and access to technology and support agreements.
“I don’t think it's just as simple as, 'Hey, what do you want to pay for these assets?’ I think it's ironing out how these assets are going to transition over a period of time.”
For more coverage of the Dunlop transaction between Goodyear and SRI, click on:
Goodyear to Sell Dunlop Brand to Sumitomo
