- The most important U.S. producer of tires for automotive corporations will promote the vast majority of its Goodyear Chemical arm to personal fairness agency Gemspring Capital in a deal anticipated to be finalized late this yr. The $650 million in gross proceeds comes on high of the $1.6 billion it achieved from the sale of two different companies earlier this yr, reaching a key goal from its Goodyear Ahead restructuring plan.
Goodyear is near closing the books on its divestment plan after the world’s third largest tire maker by quantity struck a deal to promote most of its artificial rubber enterprise for $650 million in money.
In 2023, the Fortune 500 firm had agreed with activist shareholder Elliott Funding Administration to unload a trio of companies with the objective of elevating over $2 billion to pay down debt beneath its Goodyear Ahead restructuring plan.
That focus on will now be reached after it accomplished the disposal of its Dunlop model and off-highway tire operations in two separate transactions earlier this yr that already raised a mixed $1.6 billion in gross proceeds.
“With the sale of our chemical business, we continue to demonstrate our commitment to optimizing our portfolio and creating shareholder value,” CEO Mark Stewart mentioned in a assertion on Thursday.
Inventory in Goodyear has outperformed the S&P 500, rising 25% yr up to now versus minor declines within the benchmark U.S. fairness index.
Half of Goodyear Chemical’s $1 billion in annual income is from inside gross sales
The vast majority of its artificial rubber actions will then be handed to personal fairness agency Gemspring Capital towards the top of this yr. Goodyear will, nonetheless, retain services in Niagara Falls, N.Y., and Bayport, Texas, in addition to the rights to the merchandise made there.
The transaction features a long-term provide settlement to make sure Goodyear has entry to the required uncooked supplies for its tires, the place it competes with bigger rivals Michelin of France and Japan’s Bridgestone. Half of Goodyear Chemical’s roughly $1 billion in annual income is generated internally.
“We will work closely with Gemspring to help ensure a smooth transition for our associates, customers, and suppliers,” Stewart added.
The divestments, which can elevate $2.2 billion in complete, are a core pillar of its turnaround plan that was designed to be accomplished by the top of 2025.
This story was initially featured on Fortune.com
