Akron, Ohio — Goodyear and Sumitomo Rubber Industries Ltd. (SRI) have dissolved their 16-year-old global business alliance, effective 1 Oct in accordance with the terms of their previously disclosed agreement.
“This successful resolution enhances our flexibility to grow profitably as we focus on delivering strong performance and sustainable economic value,” said CEO, chairman and president Richard Kramer.
“Despite current challenges in the global economy, the long-term growth prospects for the tire industry remain strong. This agreement paves the way for us to pursue our growth strategy and strengthen our presence in key global markets particularly where our technology leadership and the Goodyear brand provide us competitive advantage.”
The completion of the transaction will resolve the pending arbitration filed in January 2014, Goodyear said.
As a result of the dissolution, following agreements have been terminated, effective as of 1 Oct:
c Umbrella agreement, dated as of 14 June 1999, between the Company and SRI, as amended from time to time;
c Joint venture agreement for Europe, dated as of 14 June 1999, among Goodyear, certain Goodyear subsidiaries, SRI and certain subsidiaries of SRI, as amended from time to time; and
c Shareholders agreement for the Europe joint venture, dated as of 14 June 1999, among Goodyear, certain Goodyear subsidiaries and SRI, as amended from time to time.
c Goodyear retains exclusive rights to sell Dunlop-brand tires in the replacement market and to non-Japanese auto manufacturers in the US, Canada and Mexico, as well as exclusive rights to sell Dunlop-brand tires in replacement and original equipment markets in European countries where the former joint venture exclusively served the market;
c Goodyear regains exclusive rights to serve Japanese markets with Goodyear-brand tires;
c Goodyear acquired from SRI its 25-percent interest in Goodyear Dunlop Tires Europe BV:
c SRI acquired Goodyear’s 75-percent interest in Goodyear Tires North America, with the caveat that Goodyear maintains control of Dunlop-related trademarks for tire-related businesses in North America while granting to SRI an exclusive license to develop, manufacture and sell Dunlop tires for motorcycles and for Japanese-owned vehicle manufacturers in North America;
c SRI acquired Goodyear’s 25-percent interest in Dunlop Goodyear Tires Ltd.
c Goodyear acquired from SRI its 75-percent interest in Nippon Goodyear Tire Ltd;
c Goodyear sold to SRI the Huntsville, Alabama., test track used by Goodyear Dunlop Tire North America.
c SRI obtained exclusive rights to sell Dunlop-brand tires in those countries that were previously non-exclusive under the global alliance, including Russia, Turkey and certain countries in Africa;
c Goodyear paid SRI $271 million (€240 million); and
c Goodyear delivered to Goodyear Tire North America a promissory note with an initial principal amount of $56 million and a maturity date three years following the date of dissolution at an interest rate of LIBOR plus 0.1 percent.
Following the dissolution, the parties agreed to:
The liquidation and dissolution of their Technology and Purchasing joint ventures and to distribute the remaining assets and liabilities of these ventures to Goodyear and SRI in accordance with their respective ownership interests; and
To conduct an orderly sale of the common stock held by the companies in each other.