Dive Brief:
- The Goodyear Tire & Rubber Co. has agreed to sell a majority of its chemical business’ synthetic rubber assets to private equity firm Gemspring Capital Management for about $650 million.
- The pending deal, announced last month, includes Goodyear’s facilities in Houston and Beaumont, Texas, a research and development office in Akron, Ohio, and a long-term polymer chemical products supply agreement, according to a securities filing.
- The tire maker will retain its antioxidant and specialty chemical plants in Niagara Falls, New York, and Bayport, Texas, as well as the sites’ production rights, according to a release. The deal is expected to close in late 2025.
Dive Insight:
Goodyear Chemicals produces synthetic rubber and chemicals for various applications and products, including tires, golf balls, medical devices, food packaging and consumer goods, according to its website.
The divestiture is part of Goodyear’s corporate transformation plan that aims to reduce costs, generate more revenue and save $1 billion by year’s end.
One part of the strategy is to streamline Goodyear’s portfolio and production by pursuing alternatives for the company’s chemicals, Dunlop tire brand and off-the-road tire businesses to unlock $2 billion in proceeds. The company evaluated the three segments in 2023, when it launched its transformation plan, and concluded that the chemicals segment was a non-essential business, EVP and CFO Christina Zamarro said in an earnings call last month.
Goodyear completed the sell-off of its off-the-road tire and Dunlop businesses in February and May, respectively, according to its first quarter presentation.
“The work in front of us is ensuring that we deliver the right strategic value for Goodyear and for our shareholders, and we'll continue to do that,” Zamarro said.
When the deal closes later this year, Gemspring Capital Management will appoint Tesham Gor, an executive advisor at the company, to CEO of the chemicals business, according to the private equity firm’s press release.
“As a standalone entity, the business will be well positioned to accelerate product development, expand its relationships with existing and new customers globally, deliver sustainable solutions, continue to invest in its people, and drive growth and innovation through commercial, technical, and operational excellence,” Gor said in a statement.
