Goodyear has sold Dunlop to Japan's Sumitomo Rubber

The Goodyear Tire & Rubber Company has been busy doing a lot of streamlining for its business operations as of late with its Goodyear Forward transformation plan that optimizes its portfolio of brands.

Last year, the tire company sold off the Off-The-Road equipment tire business to Yokohama. This time, Goodyear has inked a deal with Japan’s Sumitomo Rubber Industries for the sale of the Dunlop brand.

Goodyear says both parties have agreed to the USD 701 million deal, which includes the entire Dunlop brand, its trademarks, intellectual properties, and intangible assets necessary for the brand’s operations in Europe, North America, and Oceania regions.

Ownership of the Dunlop brand has long been fragmented, as Sumitomo, Goodyear, and even Continental have all held rights to the brand’s tires in different regions. In the 1980s, Dunlop’s European and American entities were split between Goodyear and Sumitomo, with Goodyear taking the American market and Sumitomo taking Europe. This time, Goodyear has fully sold its entire stake in Dunlop to Sumitomo.

Under the transaction terms, Sumitomo will pay USD 526 million for the Dunlop brand and its associated intellectual properties. In addition, the Japanese manufacturer will pay Goodyear a USD 105 million transition fee for the transfer of necessary assets, along with existing Dunlop tire inventory at a yet-to-be-finalized cost.

Interestingly, the deal does not fully release Goodyear’s involvement with the Dunlop brand, as Goodyear will license back the Dunlop trademarks for commercial truck tires in Europe while retaining rights to Dunlop trademarks in the motorcycle tire businesses in Europe and Oceania.

Goodyear will also continue to manufacture, sell, and distribute Dunlop-branded consumer tires in Europe through at least December 31, 2025. Goodyear will keep the profits from the sales in this period, but they will have to pay royalties to Sumitomo.

Furthermore, Goodyear will supply certain Dunlop-branded tires to Sumitomo for the European market for a five-year period as part of the Transition Offtake Agreement (TOA).

It’s indeed a deal that someone with a business degree can better understand, but it all points out to Goodyear realigning its businesses to cut costs.