AKRON (Aug. 1) — Goodyear has completed the sale of its Engineered Products division to EPD Inc., an affiliate of Washington-based Carlyle Partners IV L.P., for almost $1.5 billion.
The deal follows Carlyle´s successful negotiations of a five-year master contract with the United Steelworkers July 30. The agreement took effect Aug. 1 and covers about 1,600 workers at four Engineered Products plants — in St. Marys, Ohio; Lincoln, Neb.; Sun Prairie, Wis.; and Marysville, Ohio.
Engineered Products operates 32 plants in 12 countries, employing about 6,300 and generating $1.5 billion in sales.
Completion of the sale "is the culmination of the capital structure improvement plan we began in 2003," Chairman and CEO Robert J. Keegan said in a prepared statement. "This plan has been critical in creating a more competitive balance sheet that will now enable us to execute against our growth strategy by providing reliable access to capital throughout the economic cycle."
The deal with Carlyle mirrors one worked out with Goodyear, according to a union spokesman, with some minor exceptions, including an increase of $3 in the pension multiplier — bringing it up to $58, in August 2009 — and some minor increases in health care costs in 2010.
Goodyear said it anticipates net proceeds of about $1.4 billion on the sale and expects to record an after-tax gain on the sale in the third quarter. It will use the proceeds to reduce debt, address legacy costs and invest in its tire businesses.