Akron, Ohio -- Goodyear has completed the sale of its Engineered Products business to EPD Inc., an entity backed by private equity firm Carlyle Partners IV LP, for $1480 million (â‚¬1082 million).
The deal was announced earlier this year, though the sale has been discussed for years now.
â€œThe completion of the sale of the Engineered Products business is the culmination of the capital structure improvement plan we began in 2003,â€ said Robert Keegan, chairman and CEO of Goodyear. â€œThis plan has been critical in creating a more competitive balance sheet that will now enable us to execute against our growth strategy by providing reliable access to capital throughout the economic cycle.â€
The firm expects net proceeds of about $1400 million from the sale, and it further plans to record an after-tax gain on the sale in the third quarter.
Proceeds will be used to reduce debt, address legacy obligations and invest in growing its core consumer and commercial tyre businesses.
Goodyear previously has stated its goal to increase high value-added production by 40 percent over five years and increase low-cost capacity by 33 percent in existing plants. The firm expects half of its capacity to be low-cost in that time frame.
The tyre maker said it has agreed with the United Steelworkers to invest in high value-added capacity in North America beyond its three-year contract, ratified in December.
Engineered Products operates 32 plants in 12 countries, employing about 6 300 and generating $1500 million in sales.
From Tire Business (A Crain publication)