Carlyle to buy Goodyear's engineered products unit for $1.48 billion

26 March 2007

Mumbai: Private equity firm Carlyle Group plans to buy the engineered products unit of Goodyear Tyre & Rubber Co for $1.475 billion under a phased acquisition. Goodyear said it plans to focus on its tyre business after the hive off.

Under the deal, Carlyle will receive rights to use the Goodyear brand and other trademarks connected with the division for 12 years and could extend that deal another decade, Goodyear said.

Goodyear's engineering products division produces various rubber products, excluding tyres, such as belts and hoses for automotive and industrial uses. It also makes conveyor belts, the tracks used on farm equipment and tanks, and molded rubber products.

The unit had revenue of $1.51 billion in 2006, including a big drop in fourth-quarter sales due to a strike by the United Steelworkers union in North America. It has about 6,500 workers and 32 facilities worldwide.

Carlyle said the business headquarters for the unit would remain in Akron, Ohio, and current management, including president and CEO Timothy Toppen, would remain in place.

The sale is subject to regulatory approvals and Carlyle reaching a labor agreement with the United Steelworkers and other conditions, Goodyear said.