Dec 13 2010
The Goodyear Tire & Rubber Company today announced that it has entered into agreements with Titan Tire Corporation, a subsidiary of Titan International Inc., to sell its European and Latin American farm tire businesses, including a licensing agreement that will allow Titan to manufacture and sell Goodyear-brand farm tires in Europe, Latin America and North America, for approximately $130 million, subject to post-closing conditions and adjustments.
Goodyear announced plans to explore the sale of the European and Latin American farm tire businesses in May 2009. The company sold its North American farm tire business, including a plant in Freeport, Ill., to Titan in 2005.
The Latin American portion of the transaction includes Goodyear's Sao Paulo, Brazil manufacturing plant, property, equipment and inventories. Subject to customary closing conditions and regulatory approvals, that portion of the transaction is expected to close in the first half of 2011.
The European portion of the transaction is subject to the exercise of a put option by Goodyear following completion of a social plan related to the previously announced discontinuation of consumer tire production at its Amiens North, France manufacturing plant and required consultation with the local Works Council. Upon completion of this action, as well as customary closing conditions and regulatory approvals, the transaction will include the Amiens North plant, property, equipment and inventories.
"This transaction reinforces our focus on our core consumer and commercial tire businesses," said Richard J. Kramer, Goodyear chairman and chief executive officer. "Our farm tire operations have been very successful for many decades. We thank our associates for their contributions," he added.
Kramer expressed his confidence that Titan, for whom farm tires are a core business, will maintain the company's strong relationships with Goodyear farm tire customers as well as the regions' farming communities.
Assuming both the Latin American and European portions of the transaction are consummated, the company's operating results, excluding any related gain or loss on the sales, are not expected to be materially affected, although the impact on segment operating income will vary by region.