Sumitomo Rubber buying Dunlop brand from Goodyear for €700m

Tokyo / Akron, Ohio – Goodyear is selling the Dunlop tire brand to Sumitomo Rubber Industries (SRI) for a cash amount of $701 million (€677 million), the companies have announced.

The transaction, which is subject to 'regulatory approvals, other closing conditions and consultations', is expected to close by mid-2025. 

The deal includes Dunlop trademark and other rights for four-wheel tires in Europe, North America, and Oceania but excludes India, Malaysia, Singapore and Brunei for four-wheel tires.

Furthermore, the transaction excludes India, Europe and Oceania for motorcycle tires, according to the 8 Jan announcement.

Under a transition license agreement (TLA), Goodyear will continue to manufacture, sell and distribute Dunlop-branded consumer tires in Europe through to at least 31 Dec (subject to extension).

Goodyear will pay SRI a royalty on sales of Dunlop products during the transition period but will otherwise retain all profits from these sales.

Terms of the TLA will automatically extend for an additional year, through 31 Dec 2026, unless the parties mutually agree to an earlier termination, added the statement.

The arrangement, it explained, will give SRI time to scale its organisation in Europe to effectively absorb the Dunlop brand and maintain service levels for existing Dunlop customers.

On completion of the TLA, Goodyear will supply certain Dunlop branded tires to SRI in Europe over a five-year period for a minimum purchase quantity of 4.5 million tires per year.

However, SRI can terminate the offtake agreement early after the third year, with 12 months' notice, the companies have agreed.

Sales of Dunlop-branded consumer and commercial tires sales totalled $532 million and $201 million respectively in 2023, while 'speciality' tire sales (excluding motorcycle) reached $22 million.

As part of the deal, Goodyear will “license back” the Dunlop trademarks from SRI for commercial (truck) tires in Europe on a long-term basis, subject to a royalty on sales.

The purchase price includes a $526 million payment for the brand and certain associated intellectual property (IP).

Furthermore, SRI will pay Goodyear a $105 million “transition fee” for support in transferring the brand and IP, the European offtake agreement and for helping Dunlop customers transition to SRI.

SRI said the deal will advance its global ‘premiumisation’ strategy while enhancing the brand through collaboration with its Dunlop-branded sports business.

There will be special focus on new products that incorporate SRI’s "active tread" technology, OE tires for premium vehicles, and motor sports, it stated.

Meanwhile, SRI will continue using its Falken brand which have been deployed in Europe, North America, and Oceania: adopting a “dual-brand approach” to business development.

SRI and Goodyear formed a global alliance in 1999, creating one of the largest tire partnerships at the time.

The agreement involved Goodyear acquiring a 75% stake in Sumitomo’s Dunlop tire operations in North America and Europe, while Sumitomo took a 25% stake in Goodyear’s operations in Japan.

The alliance was eventually dissolved in 2015 following legal disputes, with SRI gaining exclusive rights to sell Dunlop-brand tires in certain countries, including Russia, Turkey and China and some countries in Africa.

“It has been a great opportunity for our group to be able to use the Dunlop brand globally,” commented SRI president and CEO Satoru Yamamoto.

"Going forward, we will maximise the potential of the Dunlop brand, not only in the new regions where we have acquired rights, but also in existing regions," added Yamamoto.

For its part, Goodyear said it intends to use transaction proceeds to reduce leverage and fund initiatives under the Ohio-based group's ongoing 'transformation' plan.

"Our team conducted a comprehensive process focused on maximising value for Goodyear through a divestment of our Dunlop Brand," said Christina Zamarro, executive VP and CFO.