Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Rubber Division IEC
    • War in Ukraine
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • ITEC
    • Silicone
    • Online Exclusive
    • Latex
    • Technical Notebooks
    • Executive Action
    • Government/Legal
    • Opinion
    • Blogs
    • Sustainability
    • Products
    • Wacky World of Rubber
  • Airless Tires
  • Custom
    • Sponsored Content
    • White Papers
  • Resources
    • Directory
    • Classifieds & Mold Mart
  • Data
  • Events
    • RN Events
    • RN Livestreams/Webinars
    • Industry Events
    • Past Events
    • Rubber News M&A Live
    • Ask the Expert
    • Healthcare Elastomers Conference
    • Rubber In Automotive Conference
    • Women Breaking the Mold Networking Forum
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
February 13, 2014 01:00 AM

Goodyear wants to dissolve alliance with Sumitomo

Bruce Davis
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    AKRON—Goodyear is seeking to dissolve its 15-year-old global business alliance with Sumitomo Rubber Industries Ltd. and has asked the International Chamber of Commerce to arbitrate the dissolution.

    Laura Thompson, Goodyear's executive vice president and CFO, said the Akron-based tire maker approached the ICC on Jan. 10 to seek arbitration of the action after determining SRI had engaged in "anticompetitive conduct."

    She did not elaborate during a conference call Feb. 13 on the circumstances, but such conduct is one of the "exit rights" outlined in Goodyear's financial statements.

    Goodyear's action came to light this week after SRI released a statement related to inquiries from the ICC. Sumitomo President Ikuji Ikeda also commented on the matter at a news conference, according to Japanese news reports.

    The firms' alliance dates to 1999, when Goodyear acquired 75 percent of SRI's manufacturing and sales assets in Europe and North America, which operate as Goodyear Dunlop Tires Europe B.V. and Goodyear Dunlop Tires North America Ltd. The deal includes rights to the Dunlop brand in these markets.

    The firms also operate joint ventures in Japan—75-percent owned by SRI—covering sales of the Goodyear and Dunlop brands to the Japanese original equipment and replacement markets, and other ventures covering technology and materials procurement.

    According to Goodyear financial filings:

    • "SRI has the right to require us to purchase its ownership interests in GDTE and GDTNA, which we refer to as 'exit rights,' if there is a change in control of Goodyear, a bankruptcy of Goodyear or a breach, subject to notice and the opportunity to cure, of the global alliance agreements by Goodyear that has a material adverse effect on the rights of SRI or its affiliates under the global alliance agreements, taken as a whole."

    In addition, the company said, "SRI has exit rights upon the occurrence of the following events:

    • "The adoption or material revision of a business plan for GDTE or GDTNA if SRI disagrees with the adoption or revision;

    • "Certain acquisitions, investments or dispositions exceeding 10 percent but less than 20 percent of the fair market value of GDTE or GDTNA or the acquisition by GDTE or GDTNA of all or a material portion of another tire manufacturer or tire distributor;

    • "If SRI decides not to subscribe to its pro rata share of any permitted new issue of non-voting equity capital authorized pursuant to the provisions of the shareholders agreements relating to GDTE or GDTNA;

    • "If GDTE, GDTNA or Goodyear takes an action, which, in the reasonable opinion of SRI, has—or is likely to have—a continuing material adverse effect on the tire business relating to the Dunlop brand; or

    • "If at any time SRI's ownership of the shares of GDTE or GDTNA is less than 10 percent of the equity capital of that joint venture company.

    "SRI must give written notice to Goodyear of its intention to exercise its exit rights no later than three months from the date such exit rights became exercisable, except that notice of SRI's intention to exercise its exit rights upon the occurrence of the event described in the last bullet point above may be given as long as SRI's share ownership is less than 10 percent.

    "If SRI were to exercise any of its exit rights, the global alliance agreements provide that the purchase price would be based on the fair value of SRI's minority shareholder's interest in GDTE and GDTNA. The purchase price would be determined through a negotiation process where, if no mutually agreed purchase price was determined, a binding arbitration process would determine the purchase price.

    "Goodyear would retain the rights to the Dunlop brand in Europe and North America following any such purchase."

    Paris-based ICC is a global business organization that provides a forum for businesses and other organizations to examine and comprehend the nature and significance of shifts taking place in the world economy. The ICC also offers commercial arbitration service in matters relating to entities doing business across frontiers.

    Related Articles
    Sales, earnings jump for Sumitomo Rubber
    Sumitomo completes purchase of Apollo unit
    Goodyear French unit files suit against labor union
    Goodyear sues French union
    Continental CEO: Veyance will grow, not cut operation
    Goodyear reports record operating income in fourth quarter
    Sumitomo's sales and income up
    Goodyear to fully freeze pension plan
    Goodyear executives talk future
    Exiting on a high note: "Spirit of Goodyear' retires; new, advanced airship wai…
    Sumitomo reports double-digit gains in quarter
    Goodyear, Sumitomo to dissolve 16-year alliance
    Letter
    to the
    Editor

    Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    Most Popular
    1
    ASTM's new rCB standard intended to ensure quality
    2
    R.E. Carroll acquires Kentucky elastomer supplier
    3
    Mearthane Products stays on acquisition trail, gets new PE partner
    4
    No alternative in sight: Why Michelin is emphasizing sustainability of hevea
    5
    NR market sees slowdown in supply, demand growth rates
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Rubber Division IEC
      • War in Ukraine
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • ITEC
      • Silicone
      • Online Exclusive
      • Latex
      • Technical Notebooks
      • Executive Action
      • Government/Legal
      • Opinion
      • Blogs
        • Products
        • Wacky World of Rubber
      • Sustainability
    • Airless Tires
    • Custom
      • Sponsored Content
      • White Papers
    • Resources
      • Directory
      • Classifieds & Mold Mart
    • Data
    • Events
      • RN Events
        • Healthcare Elastomers Conference
        • Rubber In Automotive Conference
        • Women Breaking the Mold Networking Forum
      • RN Livestreams/Webinars
      • Industry Events
      • Past Events
      • Rubber News M&A Live
      • Ask the Expert
    • Advertise
    • DIGITAL EDITION