Goodyear Sells Dunlop Brand to SRI for $701 Million

Cleary Gottlieb represented Goodyear Tire & Rubber Company (Goodyear) in a definitive agreement to sell the Dunlop brand to Sumitomo Rubber Industries Ltd. (SRI).

Pursuant to the transaction terms, SRI will pay Goodyear cash proceeds at closing of approximately $701 million for the transfer of the Dunlop brand, which includes $526 million for the Dunlop brand and certain associated intellectual property, a $105 million transition fee for support in transitioning the Dunlop brand to SRI, and the purchase of Dunlop tire inventory for approximately $70 million.

Goodyear will continue to manufacture, sell, and distribute Dunlop branded consumer tires in Europe through at least December 31, 2025, subject to extension. Goodyear will pay a royalty to SRI during this period on Dunlop sales but will otherwise retain all profits from these sales. The term of the agreement will automatically extend for an additional year, through December 31, 2026, unless the parties mutually agree to an earlier termination. This transition period is intended to give SRI time to scale its organization in Europe to effectively absorb the Dunlop Brand and maintain service levels for existing Dunlop customers.

Following the completion of the agreement, Goodyear will supply certain Dunlop branded tires to SRI in Europe for a five-year period. The minimum purchase quantities of 4.5 million tires per year for the five-year term, on a take-or-pay basis. The agreement provides Goodyear with an agreed markup to total costs (including raw materials) for each tire sold.

Goodyear will license back the Dunlop trademarks from SRI for commercial (truck) tires in Europe on a long-term basis, subject to a royalty on sales. Goodyear can terminate this licensing agreement at any time during the licensing period. Goodyear will retain its rights to the Dunlop trademarks for its motorcycle tire businesses in Europe and Oceania.

Dunlop consumer tire sales totaled $532 million in 2023. Dunlop commercial tire sales totaled $201 million in the same period. Other specialty Dunlop tire sales (excluding motorcycle) totaled $22 million.