Sumitomo secures rights to Dunlop-branded products

Kobe, Japan – Sumitomo Rubber Industries Ltd. (SRI) has struck a deal to acquire the trademark rights to the Dunlop brand in 86 countries where it currently operates as a licensee of Sports Direct International PLC (SDI).

SRI has agreed to pay $137.5 million (€131.7 million) to SDI for the trademark rights as well as SDI's Dunlop-branded sporting goods and licensing businesses.

Among the countries where SRI operates as a licensee are Brazil, Indonesia, South Africa and Thailand.

SRI has established a new subsidiary, Dunlop International Co. Ltd., to effect the purchase and manage the assets. The new company is jointly owned by SRI and SRI's Dunlop Sports Co. Ltd unit.

Among the products affected are Dunlop-brand tennis, squash, badminton, golf, racket and table tennis balls and racquets and clothing.

After the completion of this transaction, SRI will become the owner and licensor of Dunlop trademark rights globally, except in Europe, North America, India, Australia and a few other, unnamed countries. Goodyear controls, with some exceptions, the rights to the Dunlop brand for tires in North America and Europe as part of the dissolution in 2015 of the SRI-Goodyear global alliance.

In the sports and industrial products businesses, the acquisition will enable SRI to produce and sell Dunlop-branded products globally. SRI already controls the brand rights in these areas in Japan, South Korea and Taiwan.

As part of the transaction, SRI will grant SDI a royalty-free license to continue to use the Dunlop brand for premium workwear and safety wear for SDI's own retail purposes, SDI said.

SRI has the option to acquire these rights in the future subject to certain mechanical conditions for $12.5 million, SDI said. The parties also will enter into certain other commercial arrangements in relation to the supply of products to SDI's core business in Europe.

SDI describes itself as a leading European distributor of internationally recognised third- party brands, including Nike, Adidas, Under Armour and Puma, at 700 sports stores in the UK and throughout continental Europe.

SDI said the Dunlop business generated nearly $46 million in revenue for the year ended April 24, 2016, with a pre-tax operating margin of 9.5%.

Sumitomo has been working for decades to secure the rights to the Dunlop brand globally, ever since the brand rights became scattered after the bankruptcy of Dunlop Holdings more than 30 years ago.