Goodyear divests chemical business to private equity firm Gemspring

Akron, Ohio – Goodyear Tire & Rubber Co. has completed the final round of its divestment plant with the sale of its ‘chemical business’ to an affiliate of private equity firm Gemspring Capital Management, LLC.

The business was sold for a purchase price of $650 million (€565 million), effective 31 Oct, Goodyear said. Cash proceeds at closing amounted to $580 million after working capital adjustments.

The deal included Goodyear’s chemical facilities in Houston and Beaumont, Texas, and a related research office in Akron, Ohio.

Goodyear said it has retained its facilities in Niagara Falls, New York, and Bayport, Texas, and its rights to the products produced at these facilities.

According to Goodyear’s website, the Bayport facility produces antioxidant hydroquinone, meta and para DIPB, acetone and antioxidants.

The Niagara Falls facility produces Polystay branded antioxidant, antiozonant and anti-flex cracking agents.

With the sale of the business, the group has now completed all of the planned asset sales included in the Goodyear Forward transformation programme, said CEO and president Mark Stewart.

According to Stewart, Goodyear has surpassed its initial expectations, with total gross proceeds from the divestitures of standing at $2.2 billion.

“As a result, we have a more focused, streamlined portfolio that will allow us to grow our core products and services,” he said.

Goodyear intends to use transaction proceeds for debt reduction and to fund initiatives in connection with the Goodyear Forward transformation plan.

Unveiled two years ago, the Goodyear Forward outlined the tire maker’s ‘transformation plan’ which involved the divestments of three business areas: chemicals; off-the-road and the Dunlop brand.

At the time, the Akron-based group said it expected gross proceeds of over $2 billion from the divestments.

Goodyear sold its OTR business to Yokohama Rubber (ERJ report) and its Dunlop brand to Sumitomo Rubber (ERJ report) earlier this year.