Goodyear agrees $701 million sale of Dunlop brand to Sumitomo Rubber Industries

The long-awaited sale ‘advances’ the American tyre manufacturer’s Goodyear Forward transformation plan

Goodyear has agreed to sell its Dunlop tyre brand to Sumitomo Rubber Industries in a deal worth an estimated $701 million. The definitive agreement will see the “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” transferred to SRI. The terms of the deal are relatively complex, including a Transition Offtake Agreement in Europe that will last for five years, as well as Goodyear immediately licensing back Dunlop trademarks for use on commercial vehicle tyres. Goodyear will also retain its rights to Dunlop trademarks for use on motorcycle tyres in Europe and Oceania. Goodyear expects the transaction to close by mid-2025, subject to regulatory approvals and other customary closing conditions and consultations.

Goodyear’s sale of the Dunlop brand has been the subject of much discussion since the company announced a strategic review of the brand as part of its Goodyear Forward transformation plan – though speculation on the tyre brand’s future has been rife since the acquisition and integration of Cooper Tire, which added more brands to an already busy portfolio. The company’s transformation plan, prompted by shareholder Elliott Investment Management’s “open letter” in May 2023, identified the Dunlop brand as one of three business areas for which it would pursue “strategic alternatives.” Along with its Chemical business and its Off-the-Road tyre operation – the sale of which to The Yokohama Rubber Co. was agreed in July 2024 for $0.9 billion – Goodyear wanted to raise more than $2 billion; the sale of Dunlop has raised a little over one-third of this total, matching its valuation in November 2023.

Details of the agreement

Goodyear detailed the terms of the transaction for SRI to acquire Dunlop in its announcement of the sale. SRI will pay “approximately $701 million” in total for “the transfer of the Dunlop Brand across the relevant geographies, a ‘Transition Fee’ for support in transitioning the Dunlop Brand to SRI, and the purchase of Dunlop tyre inventory.” The brand and intellectual property acquired by SRI is valued at $526 million. The additional Transition Fee amounts to $105 million, which will support the transfer of Dunlop customers to SRI, including planning, distribution, and logistics support over the next five years. Finally, SRI will pay an estimated $70 million for existing Dunlop inventory, though this is subject to confirmation during the sale process, hence the announcement of an estimated total figure for the sale.

Important milestone

Mark Stewart, Goodyear chief executive officer and president, called the sale of Dunlop “another important milestone” in the implementation of the Goodyear Forward transformation plan. He stated: “We are optimising our portfolio and reducing leverage to drive sustainable and substantial shareholder value creation. 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.”

“Our team conducted a comprehensive process focused on maximising value for Goodyear through a divestment of our Dunlop Brand, and we are very pleased with the outcome achieved,” said Christina Zamarro, executive vice president and chief financial officer. “We are committed to working closely with SRI to ensure a smooth transition for customers of the Dunlop Brand.”