Sumitomo Rubber confirms Goodyear partnership dissolution talks – but cautions against speculation

Responding to reports from a number of media outlets regarding the dissolution of the 16-year old global alliance between Sumitomo Rubber Industries (SRI) and Goodyear Tire & Rubber, SRI stated today that these are “purely speculative in nature.” The company doesn’t refute the reports’ veracity – SRI admits that “it is true that SRI and Goodyear are currently engaged in discussions concerning the possible dissolution of our alliance agreement and our joint ventures” – however it wants to make it clear that neither it nor Goodyear have issued an official announcement on the matter. Nikkei Asian Review, which published the news yesterday, says an announcement may be made “as early as this week.”

In February 2014, Goodyear confirmed its wish to end the partnership venture with SRI. The tyre maker claimed its Japanese partner engaged in anti-competitive conduct, and this led to arbitration proceedings seeking the dissolution of the global alliance beginning on 10 January 2014. In a statement released at the time, Goodyear also made it known that it would seek “damages and other appropriate relief” from SRI. The company did not provide any specific details regarding the nature of the alleged conduct.

The reports indicate that Goodyear will take full ownership of the joint sales and production venture it runs in Europe, while SRI will buy out Goodyear’s share in the sales and production venture the two companies run in North America. At present these two operations are split 75/25, with Goodyear holding the majority share. Nikkei says Goodyear will pay SRI between 30 billion and 40 billion yen (£158 million to £210 million) to facilitate these transfers.

While the reports published this past day note that the partnership’s dissolution will free SRI in regards to its investments in emerging markets, no mention was made of the future of the Dunlop brand in Europe and North America. Under the terms of the partnership, Goodyear holds the rights to the brand in these two regions.

SRI states that no specific decision regarding the global alliance’s dissolution have been made as yet, however the company will “promptly announce any such decisions when and if they are made.”