Goodyear Announces Sale of Off-The-Road Tire Business to Yokohama for $905 Million
Goodyear Tire & Rubber Company (NASDAQ: GT) has announced the sale of its Off-the-Road (OTR) tire business to Yokohama Rubber Company for $905 million in cash. This move is part of Goodyear's strategic review and transformation plan, Goodyear Forward. The deal excludes OTR tires for U.S. military and defense applications, which Goodyear will retain. As part of the agreement, Goodyear will continue to manufacture certain OTR tires for Yokohama for up to five years post-closing.
The transaction, expected to close by early 2025, is subject to regulatory approvals and other conditions. Goodyear plans to use the proceeds to reduce leverage and fund initiatives related to its transformation plan. Evercore is acting as the financial advisor, while Sullivan & Cromwell LLP serves as the legal advisor for Goodyear in this deal.
La Goodyear Tire & Rubber Company (NASDAQ: GT) ha annunciato la vendita della sua attività di pneumatici Off-the-Road (OTR) alla Yokohama Rubber Company per 905 milioni di dollari in contanti. Questa mossa fa parte della revisione strategica e del piano di trasformazione di Goodyear, noto come Goodyear Forward. L'accordo esclude i pneumatici OTR per applicazioni militari e di difesa statunitensi, che Goodyear manterrà. Come parte dell'accordo, Goodyear continuerà a produrre alcuni pneumatici OTR per Yokohama fino a cinque anni dopo la chiusura.
La transazione, che dovrebbe concludersi entro all'inizio del 2025, è soggetta ad approvazioni regolatorie e altre condizioni. Goodyear prevede di utilizzare i proventi per ridurre il debito e finanziare iniziative relative al suo piano di trasformazione. Evercore funge da consulente finanziario, mentre Sullivan & Cromwell LLP è il consulente legale per Goodyear in questo affare.
La Goodyear Tire & Rubber Company (NASDAQ: GT) ha anunciado la venta de su negocio de neumáticos Off-the-Road (OTR) a Yokohama Rubber Company por 905 millones de dólares en efectivo. Este movimiento es parte de la revisión estratégica y el plan de transformación de Goodyear, conocido como Goodyear Forward. El acuerdo excluye los neumáticos OTR para aplicaciones militares y de defensa de EE. UU., que Goodyear retendrá. Como parte del acuerdo, Goodyear continuará fabricando ciertos neumáticos OTR para Yokohama durante hasta cinco años después del cierre.
La transacción, que se espera cierre a principios de 2025, está sujeta a aprobaciones regulatorias y otras condiciones. Goodyear planea utilizar los ingresos para reducir el apalancamiento y financiar iniciativas relacionadas con su plan de transformación. Evercore actúa como asesor financiero, mientras que Sullivan & Cromwell LLP es el asesor legal de Goodyear en este acuerdo.
굿이어 타이어 & 고무 회사(NASDAQ: GT)가 요코하마 고무 회사에 오프-더-로드(OTR) 타이어 사업을 9억 5천만 달러에 현금으로 판매한다고 발표했습니다. 이 조치는 굿이어의 전략 검토 및 변혁 계획인 굿이어 포워드의 일환입니다. 이 거래는 미국 군사 및 방어 목적의 OTR 타이어는 제외되며, 굿이어가 이들을 보유합니다. 계약의 일환으로 굿이어는 종결 후 최대 5년 동안 요코하마를 위해 특정 OTR 타이어를 계속 제조할 것입니다.
이 거래는 2025년 초까지 마무리될 것으로 예상되며, 규제 승인 및 기타 조건이 필요합니다. 굿이어는 수익금을 사용하여 부채를 줄이고 변혁 계획과 관련된 이니셔티브에 자금을 지원할 계획입니다. 에버코어는 재무 자문 역할을 하며, 설리반 & 크롬웰 LLP는 이번 거래에서 굿이어의 법률 자문을 맡고 있습니다.
La Goodyear Tire & Rubber Company (NASDAQ: GT) a annoncé la vente de son activité de pneus Off-the-Road (OTR) à la Yokohama Rubber Company pour 905 millions de dollars en espèces. Ce mouvement fait partie de l'examen stratégique et du plan de transformation de Goodyear, intitulé Goodyear Forward. L'accord exclut les pneus OTR destinés aux applications militaires et de défense américaines, que Goodyear conservera. Dans le cadre de l'accord, Goodyear continuera à fabriquer certains pneus OTR pour Yokohama jusqu'à cinq ans après la clôture.
La transaction, qui devrait se clôturer d'ici début 2025, est soumise à des approbations réglementaires et à d'autres conditions. Goodyear prévoit d'utiliser les produits de la vente pour réduire son levier financier et financer des initiatives liées à son plan de transformation. Evercore agit comme conseiller financier, tandis que Sullivan & Cromwell LLP sert de conseiller juridique pour Goodyear dans cette affaire.
Die Goodyear Tire & Rubber Company (NASDAQ: GT) hat den Verkauf ihres Off-the-Road (OTR) Reifen Geschäfts an die Yokohama Rubber Company für 905 Millionen Dollar in bar angekündigt. Dieser Schritt ist Teil von Goodyears strategischer Überprüfung und dem Transformationsplan Goodyear Forward. Der Deal schließt OTR-Reifen für US-Militär- und Verteidigungsanwendungen aus, die Goodyear behalten wird. Im Rahmen der Vereinbarung wird Goodyear für Yokohama bis zu fünf Jahre nach dem Abschluss weiterhin bestimmte OTR-Reifen herstellen.
Die Transaktion, die voraussichtlich bis Anfang 2025 abgeschlossen sein wird, unterliegt regulatorischen Genehmigungen und weiteren Bedingungen. Goodyear plant, die Erlöse zur Reduzierung der Verschuldung und zur Finanzierung von Initiativen im Zusammenhang mit seinem Transformationsplan zu verwenden. Evercore fungiert als Finanzberater, während Sullivan & Cromwell LLP als juristischer Berater von Goodyear in diesem Geschäft tätig ist.
- Sale of OTR tire business for $905 million in cash
- Retention of OTR tire business for U.S. military and defense applications
- Continued manufacturing agreement with Yokohama for up to 5 years
- Proceeds to be used for debt reduction and funding transformation initiatives
- Divestment of a significant business segment
- Potential loss of revenue stream from OTR tire business
Insights
The sale of Goodyear's Off-the-Road (OTR) tire business for
However, this deal's immediate effect on earnings must be carefully analyzed. The OTR business, focusing on mining, construction and industrial markets, likely contributed significant revenues and profits. The Product Supply Agreement with Yokohama, where Goodyear will continue manufacturing certain OTR tires for up to five years, ensures some continuity of revenue, albeit likely at lower margins compared to selling directly. The investors should monitor how the reduction in operational scope impacts Goodyear's overall profitability and whether the leverage reduction translates into tangible financial benefits.
Analyzing the market implications, the sale of Goodyear's OTR tire business to Yokohama can be seen as a strategic consolidation move. This transaction allows Yokohama to expand its footprint and capabilities in the OTR tire market, potentially boosting its market share in sectors like mining, construction and industrial applications. For Goodyear, this divestiture aligns with a strategy to streamline operations and focus resources on core business areas aligned with the Goodyear Forward transformation plan.
In the broader market context, this deal may signal a trend where large manufacturers streamline their operations to focus on specialized, higher-margin segments. Investors should watch how competitors respond to this move and whether other companies in the tire industry follow suit. The regulatory approvals process will also be significant; any delays or complications could affect the transaction's finalization and thus impact market sentiment.
From a legal standpoint, the announced sale of Goodyear's OTR tire business involves several key elements that investors should consider. The transaction is subject to regulatory approvals and other customary closing conditions, which means there are risks related to antitrust clearances and potential regulatory hurdles. These could delay the transaction or require modifications to the terms.
The Product Supply Agreement is another critical aspect. This contract, where Goodyear will manufacture certain OTR tires for Yokohama for up to five years, indicates a continued but altered business relationship. This period will be important for ensuring smooth operations and addressing any transition issues. Legal advisors will need to ensure that this agreement is robust and covers all potential contingencies to protect both companies' interests.
Goodyear's OTR tire business provides industry-leading OTR tires around the world for surface and underground mining, construction and quarry, and port and industrial end markets. Goodyear OTR offers a comprehensive suite of trusted products, services and tire management solutions that help customers optimize their operations and improve productivity and efficiency.
"The sale of the OTR business marks an important milestone as we continue to execute against our Goodyear Forward transformation plan," said Mark Stewart, Goodyear Chief Executive Officer and President. "We are grateful to our OTR colleagues who have driven the success of the business and are committed to working closely with Yokohama to ensure a smooth transition for customers and associates."
Goodyear will retain its business providing OTR tires for
The transaction is subject to regulatory approvals, other customary closing conditions and consultations and is expected to close by early 2025. Goodyear intends to use transaction proceeds to reduce leverage and fund initiatives in connection with the Goodyear Forward transformation plan.
Evercore is acting as exclusive financial advisor and Sullivan & Cromwell LLP is acting as legal advisor to Goodyear.
About The Goodyear Tire & Rubber Company
Goodyear is one of the world's largest tire companies. It employs about 71,000 people and manufactures its products in 54 facilities in 21 countries around the world. Its two Innovation Centers in
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act.
Such forward-looking statements include, but are not limited to, statements relating to the proposed transaction, including statements regarding the benefits of the transaction and the anticipated timing of the transaction, and information regarding the businesses of Goodyear and Yokohama. There are a variety of factors, many of which are beyond our control, that affect our operations, performance, business strategy and results and could cause our actual results and experience to differ materially from the assumptions, expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to: our ability to implement successfully the Goodyear Forward plan and our other strategic initiatives, including the transaction; risks relating to the ability to consummate the transaction on a timely basis or at all, including failure to obtain the required regulatory approvals or to satisfy the other conditions to the closing of the transaction; actions and initiatives taken by both current and potential competitors; increases in the prices paid for raw materials and energy; inflationary cost pressures; delays or disruptions in our supply chain or the provision of services to us; a prolonged economic downturn or period of economic uncertainty; deteriorating economic conditions or an inability to access capital markets; a labor strike, work stoppage, labor shortage or other similar event; financial difficulties, work stoppages, labor shortages or supply disruptions at our suppliers or customers; the adequacy of our capital expenditures; changes in tariffs, trade agreements or trade restrictions; foreign currency translation and transaction risks; our failure to comply with a material covenant in our debt obligations; potential adverse consequences of litigation involving the Company; as well as the effects of more general factors such as changes in general market, economic or political conditions or in legislation, regulation or public policy. Additional factors are discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.
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SOURCE The Goodyear Tire & Rubber Company
FAQ
What is the value of Goodyear's OTR tire business sale to Yokohama?
When is the Goodyear OTR tire business sale expected to close?
Will Goodyear (GT) continue to manufacture OTR tires after the sale?
How does Goodyear (GT) plan to use the proceeds from the OTR tire business sale?
