Goodyear Sells Dunlop Brand to SRI for RM3.14 Billion

Sumitomo Rubber Industries (SRI), the outfit behind Falken tyres, has purchased the Dunlop trademark rights in Europe, North America, and Oceania from the Goodyear Tire & Rubber Company (Goodyear) for $701 Million (RM3.14 Billion).

This sale comes as part of Goodyear's "Goodyear Forward" cost reduction transformation plan, which aims to optimise its portfolio and reduce its debt. The acquisition comprises trademarks and intellectual property required for the Dunlop brand's activities in these regions.

The acquisition includes an estimated $70 Million (RM315 Million) for Goodyear's current tyre inventory, $526 Million (RM2.36 Billion) for the Dunlop brand, and $105 Million (RM473 Million) as a transition fee to help SRI take over Dunlop operations.

The transition will still allow Goodyear to manufacture and sell Dunlop consumer tyres in Europe through at least 2025 under a licensing arrangement, with royalties paid to SRI. Afterward, Goodyear will supply Dunlop tyres to SRI for up to five years under a separate agreement.

Goodyear however will continue to own the Dunlop trademarks for its motorcycle tyre businesses in Oceania and Europe.

In 2023, Dunlop's consumer tyres brought in $532 Million (RM2.4 Billion), while its business tyres brought in an extra $201 Million (RM904 Million). Goodyear expects an annual operating income drop of $65 Million (RM292 Million) after 2026, which will be offset by savings from debt payments, even though it does not foresee a substantial financial effect during the transition.

The deal is expected to conclude by the middle of 2025, pending regulatory clearances. Executives from Goodyear emphasised that the sale is a calculated strategy to concentrate on key businesses, increase shareholder value, and guarantee a smooth transition for Dunlop consumers under SRI.

In Malaysia, as part of the "Goodyear Forward" transformation, Goodyear shuttered its Shah Alam production plant to optimise cost. The firm now sources tyres supplied in Malaysia from production facilities in Indonesia, Thailand, China, and the United States.