Goodyear Tire & Rubber Company (GT) has reached a definitive agreement to sell the Dunlop brand to Sumitomo Rubber Industries, Ltd. This transaction encompasses trademarks and essential intangible assets needed for Dunlop's operations across Europe, North America, and Oceania, incorporating a range of consumer, commercial, and specialty tires, alongside pertinent intellectual properties.
Under the terms of the sale, Goodyear will receive approximately $701 million in cash from Sumitomo upon finalizing the deal. This amount accounts for the transfer of Dunlop brand rights in the specified regions, a "Transition Fee" for assisting Sumitomo during the brand's handover, and the acquisition of Dunlop's tire inventory. Furthermore, the agreement outlines provision for additional ongoing supply, licensing, and related arrangements.
The closure of this transaction is anticipated by mid-2025. Goodyear plans to utilize the proceeds to decrease its leverage and support initiatives under its Goodyear Forward transformation strategy.
Moreover, through a Transition License Agreement, Goodyear will continue manufacturing, selling, and distributing Dunlop consumer tires in Europe until at least December 31, 2025. During this period, Goodyear will pay royalties to Sumitomo, yet will retain the entirety of the sales profits. Unless agreed otherwise by both parties, this agreement is set to automatically extend until December 31, 2026.
After the Transition License Agreement concludes, Goodyear will supply certain Dunlop branded tires to Sumitomo in Europe under a five-year Transition Offtake Agreement (TOA). This agreement mandates a minimum purchase of 4.5 million tires annually over its term on a take-or-pay basis and allows Sumitomo to terminate early after three years, with a twelve-month notice and an applicable termination fee.
Additionally, Goodyear will reacquire a long-term license for Dunlop trademarks relating to commercial (truck) tires in Europe, subject to sales royalties. However, Goodyear reserves the right to terminate this licensing agreement at its discretion during its term.
In 2023, Dunlop consumer tire sales amounted to $532 million, while commercial tire sales reached $201 million, with other specialty tires (excluding motorcycles) generating $22 million in sales.
Goodyear will maintain its rights to the Dunlop trademarks specifically for its motorcycle tire operations in Europe and Oceania.
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