Sumitomo, Goodyear Dissolve Their Tire Alliance

Sumitomo Rubber Industries Ltd. and Goodyear Tire & Rubber Co. have agreed to end their 16-year-old partnership, which has operated joint ventures to make and sell tires in North America, Europe and Japan.

Disbanding the partnership will resolve a pending two-year-old antitrust complaint against both companies. Under terms of the deal, Goodyear will pay SRI $271 million and repay a pre-existing $55 million debt to the Japanese company within three years. Goodyear also will dispose of its 3.4 million shares in SRI.

The agreement ends all four Goodyear-SRI joint ventures by assigning full ownership of each one to one of the partners.

In Japan, Goodyear will take full ownership of Nippon Goodyear Ltd., which sells aftermarket Goodyear brand tires. SRI will acquire Dunlop Goodyear Tires Ltd., which sells Dunlop and Goodyear tires to carmakers. SRI will emerge with exclusive original-equipment and aftermarket rights to the Dunlop brand, and Goodyear will have the same exclusivity for its brand in Japan.

In North America, SRI will acquire Goodyear's 75% stake in Goodyear Dunlop Tires North America Ltd. Goodyear will retain rights to sell Dunlop tires in the U.S., Canada and Mexico.

In Europe, Goodyear will acquire SRI's 25% stake in Goodyear Dunlop Tires Europe BV. Goodyear will continue to market original equipment and aftermarket Dunlop-brand consumer, commercial, motorcycle and racing tires in much of Europe. SRI will obtain exclusive rights to sell Dunlop tires in Russia, Turkey and parts of Africa.