The Goodyear Tire & Rubber Company has announced that it has signed a definitive agreement to sell the majority of its Goodyear Chemical business to Gemspring Capital Management, LLC
Goodyear restructuring continues with the disposal of much of its Chemical business
The transaction is another step in the previously announced strategic review of Goodyear’s Chemical business in connection with the Goodyear Forward transformation plan.
Observers might well consider this rationalisation of operations as an indicator of the pressure Goodyear is under – it withdrew from the agricultural sector some time ago, Goodyear branded agricultural tyres are manufactured by Titan, and earlier this year, it withdrew from the OTR sector, selling its OTR operations to Yokohama. It also sold off the Dunlop brand to Sumitomo.
Goodyear is not alone in rationalisation, Continental has sold off divisions, and most recently withdrew from the agricultural sector, and announced the closure of its Alor Setar tyre plant in Malaysia.
The premium tyre manufacturers are fighting a long running defence of their business, which has become under increasing pressure from manufacturers from the Far East and India.
ETRMA figures show that the largest pressure is coming from imports from Vietnam and Thailand, whilst China is steadily increasing its market share in Europe and North America.
Europe is currently investigating, once again, the possibility that China is dumping tyres in Europe, and of course Donald Trump’s tariff war is all about protecting US manufacturers from cheap imports, largely from China.
Goodyear Chemical is a leading producer of synthetic rubber, offering a broad product portfolio in North America and serving the automotive aftermarket as well as the consumer and industrial end markets.
Pursuant to the transaction terms, Gemspring will pay Goodyear cash proceeds at closing of approximately $650 million, subject to certain post-closing adjustments, for Goodyear Chemical facilities in Houston and Beaumont, Texas, and a related research office in Akron, Ohio. Additionally, the transaction provides for a long-term supply agreement.
“With the sale of our chemical business, we continue to demonstrate our commitment to optimising our portfolio and creating shareholder value,” said Goodyear Chief Executive Officer and President Mark Stewart. “We are grateful to our Goodyear Chemical associates who have driven the success of this business. We will work closely with Gemspring to help ensure a smooth transition for our associates, customers and suppliers.”
The transaction is subject to regulatory approval, as well as other customary closing conditions and is expected to close by late 2025. Goodyear intends to use transaction proceeds to reduce leverage and fund initiatives in connection with the Goodyear Forward transformation plan.
Goodyear will retain its Chemical facilities in Niagara Falls, New York, and Bayport, Texas, and its rights to the products produced at such facilities.
