Goodyear to sell Dunlop brand to Sumitomo Rubber for $700M; The analyst responds positively to Investing.com
Investing.com — Goodyear Tire (NASDAQ:) & Rubber announced plans to sell its Dunlop brand to Sumitomo Rubber Industries of Japan for approximately $700 million.
Shares of Goodyear rose 1.8% in premarket trading.
The Ohio-based tile maker confirmed on Tuesday that it has agreed to transfer Dunlop’s trademarks and intangible assets in Europe, North America, and Oceania to the Japanese rubber product maker.
The deal involves the sale of Dunlop’s products related to consumer, commercial and other specialty tires. Sumitomo Rubber will pay Goodyear approximately $701 million upon closing. This payment includes the cost of transferring the Dunlop brand to the relevant regions, certain fees related to the change, and the purchase of Dunlop tires.
Goodyear said he plans to use the proceeds of the sale to reduce his financial burden and fund other projects. This decision to sell the Dunlop brand comes after a brand strategy review was carried out.
Completion of the project is subject to regulatory approval and is expected to be completed by mid-2025.
By 2023, Dunlop consumer tire sales will reach $532 million, and commercial tire sales will reach $201 million, according to Goodyear. As part of the deal, Goodyear will retain certain rights to the Dunlop brand.
Specifically, it will re-license Dunlop’s trademark for truck tires in Europe and retain its rights to the Dunlop trademark for its motorcycle businesses in Europe and Oceania.
“This transaction helps Goodyear reduce its exposure to non-premium tires in the medium term, a segment where tire manufacturers continue to face industry emergencies. In the long run, the key question will be how Goodyear can use its spare capacity after the liquidation. of downtime and size of capex required for recycling,” Morgan Stanley (NYSE:) analysts wrote in this note.
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