The takeover in detail
As reported by Powersports Business magazine, the deal includes the Dunlop brand as well as the rights to manufacture and distribute the tires in the relevant markets. Sumitomo will pay Goodyear around 701 million US dollars (approx. 650 million euros) for this. In addition to the direct acquisition of the brand and inventory, Sumitomo will pay a “transition fee” to ensure the smooth transition of the Dunlop business. Long-term supply and license agreements are also part of the transaction.
Although the acquisition is still subject to regulatory approvals, it is expected to be completed later this year. Sumitomo already owns other tire brands such as Falken and Ohtsu and intends to further strengthen its market position with the acquisition.
A look back at the company’s history
The relationship between Goodyear, Dunlop and Sumitomo dates back to the 1980s. In 1985, Sumitomo acquired the rights to the Dunlop brand as well as the production and distribution rights, but not the company itself. Goodyear later entered into an agreement that allowed the US company to sell Dunlop tires under its own name. This required Goodyear to acquire 75% of Sumitomo’s North American and European businesses.
In 2014, the partnership began to falter when Goodyear accused Sumitomo of unfair competition and discontinued the collaboration. Sumitomo then bought back the entire motorcycle tire business from Dunlop in 2015. The next step now follows with the complete takeover of the brand.
Effects of the takeover
As part of Goodyear’s realignment, the strategic decision was made to sell Dunlop. Part of this restructuring included the closure of the Dunlop plant in New York, resulting in the loss of around 1,500 jobs. In future, Sumitomo will manufacture and distribute all Dunlop tires worldwide itself.
Whether and in what form the takeover will affect future product development and the range of Dunlop tires remains to be seen. The Japanese company is known for further expanding strong brands and promoting new innovations.
