Inwestowanie.com — Goodyear tire (NASDAQ:) & Rubber announced plans to sell its Dunlop brand to Japan’s Sumitomo Rubber Industries for approximately $700 million.

Goodyear shares rose 1.8% in pre-market trading.

The Ohio-based tire maker confirmed Tuesday that it has agreed to transfer Dunlop’s trademarks and nonphysical assets in Europe, North America and Oceania to the Japanese maker of rubber products.

The transaction includes the sale of Dunlop’s consumer, commercial and other specialty tire assets. Sumitomo Rubber will pay Goodyear approximately $701 million upon closing of the transaction. This payment covers the cost of transferring the Dunlop brand between the relevant regions, certain transition fees and the purchase of Dunlop tire inventory.

Goodyear said it plans to employ the proceeds from the sale to reduce leverage and fund other initiatives. The decision to sell the Dunlop brand was made after conducting a strategic review of the brand.

Completion of the transaction is subject to regulatory approvals and is expected to be finalized by mid-2025.

According to Goodyear, in 2023, Dunlop consumer tire sales were $532 million, while commercial tire sales reached $201 million. As part of the agreement, Goodyear will retain certain rights to the Dunlop brand.

Specifically, it will license the Dunlop trademarks for truck tires in Europe and retain its rights in the Dunlop trademarks for its motorcycle tire businesses in Europe and Oceania.

“This transaction will support Goodyear reduce its exposure to non-premium tires in the medium term, a segment where tire manufacturers continue to face industry difficulties. “In the longer term, the key question will be how Goodyear can use spare capacity once the acceptance period is complete and the amount of capital expenditure required to replace tools,” Morgan Stanley (NYSE:) – analysts wrote in a note.

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