I'll be honest. When I was first looking at this story, I wasn't aware of the weird-ass history Goodyear has with both Dunlop and Sumitomo, the Japanese tire company it's sold Dunlop to.
I wasn't aware of the often incestuous nature of the relationship between the three over the last three decades, and how any of this actually makes a lick of sense. Maybe someone with a business degree could tell me, but when I started looking at it, I went all cross-eyed.
There is a takeaway, however, and that's that Goodyear has fully sold its entire stake in Dunlop to Sumitomo, which already owns the brand's motorcycle tire company. Well, sorta. Again, the more I looked at this, the more my eyes went sideways.
Maybe this is why I write instead of run companies?
So Goodyear, Dunlop, and Sumitomo's history goes way back. Sumitomo had acquired the Dunlop rights to the Dunlop name, as well as the rights to manufacture and market Dunlops in 1985. But in that deal, it didn't acquire the actual company. It was only later that Goodyear and Sumitomo struck a deal allowing the former company to use the name and sell the tires under its auspices, though Goodyear had to purchase 75% of Sumitomo's North American and European businesses.
And here's where it gets juicy. in 2014, Goodyear alleged that Sumitomo was engaging in anti-competitive practices and dissolved the partnership. This is why in 2015 Sumitomo reacquired Dunlop's entire motorcycle tire division from Goodyear. It's about here I think I started pulling out my hair. However, as of this month, Sumitomo has struck another deal with Goodyear to fully acquire the Dunlop business, including manufacturing the tires itself.
Sure, all that makes total sense.
As per Powersports Business, "The Goodyear Tire & Rubber Company announced that it has agreed to sell the Dunlop brand to Sumitomo Rubber Industries, Ltd. (SRI)," adding, "The sale of the Dunlop brand follows a previously announced strategic review of the brand in connection with Goodyear’s transformation plan. Under the transaction terms, SRI will pay Goodyear cash proceeds at closing of approximately $701 million for the transfer of the Dunlop brand across the relevant geographies, a “Transition Fee” for support in transitioning the Dunlop brand to SRI, and the purchase of Dunlop tire inventory. The transaction also provides for additional ongoing offtake, licensing and other special arrangements."
The sale of Dunlop to Sumitomo is still pending regulatory and other approvals but is expected to go through later this year. Sumitomo also owns Falken and Ohtsu Tires. And, late last year, Dunlop shuttered its New York motorcycle tire plant. But as I said earlier, I didn't know what I was getting myself into, though I'm sorta glad I did, as this is one wild tale of corporate businessy business. I think...
