Transaction valued at approximately $701 million supported Goodyear's portfolio rationalisation strategy.

The Goodyear Tire & Rubber Company announced that it had entered into a definitive agreement to sell the Dunlopbrand to Sumitomo Rubber Industries (SRI), covering trademarks and related intangible assets used for consumer, commercial and specialty tyres across Europe, North America and Oceania.

The transaction followed Goodyear's previously disclosed strategic review of the Dunlop brand as part of its Goodyear Forward transformation programme. Under the terms of the agreement, Goodyear was to receive gross cash proceeds of approximately $701 million at closing, subject to customary regulatory approvals and closing conditions. The deal was expected to close by mid-2025.

According to Goodyear, the proceeds were intended to be used primarily to reduce leverage and support ongoing transformation initiatives.

Structure of the transaction

The agreed consideration comprised three main components. SRI was to pay $526 million for the Dunlop brand and associated intellectual property, alongside a $105 million transition fee to cover Goodyear's support in transferring the brand and customer relationships. In addition, SRI agreed to purchase existing Dunlop consumer tyre inventory, with Goodyear estimating proceeds of approximately $70 million, subject to final adjustment at closing.

As part of the transition arrangements, Goodyear was to continue manufacturing, selling and distributing Dunlop-branded consumer tyres in Europe under a Transition License Agreement through at least the end of 2025, with a potential extension into 2026. During this period, Goodyear would pay royalties to SRI but retain the operating profits from sales.

Following the transition phase, Goodyear also agreed to supply certain Dunlop-branded tyres to SRI in Europe for a five-year period under a Transition Offtake Agreement. This agreement included minimum annual purchase volumes and provided Goodyear with a cost-plus pricing structure. SRI retained an option to terminate the supply agreement early after three years, subject to notice and a termination fee.

Brand rights and operational impact

Under the agreement, Goodyear licensed back the Dunlop trademarks for use on commercial (truck) tyres in Europe on a long-term basis, subject to royalty payments. Goodyear also retained its rights to the Dunlop trademarks for motorcycle tyres in Europe and Oceania.

Dunlop consumer tyre sales totalled $532 million in 2023, while commercial tyre sales accounted for $201 million. Goodyear stated that the transaction was not expected to materially affect segment operating income during the transition period. Afterward, the company anticipated a reduction of approximately $65 million per year during the supply agreement term, before considering any offsetting benefits from debt reduction or margin improvement initiatives.

Goodyear described the transaction as part of a broader effort to streamline its brand portfolio and focus resources on its core brands, while Sumitomo Rubber Industries was positioned to assume full ownership and future development of the Dunlop brand in the covered regions.

To learn more, please read the original press release by Goodyear.