Goodyear Completes Sale of Engineered Products Business
The Goodyear Tire & Rubber Company today announced that it has completed the previously announced sale of substantially all of its Engineered Products business to EPD, Inc., an entity sponsored by Carlyle Partners IV, L.P., for $1.475 billion, subject to certain post-closing adjustments.
“The completion of the sale of the Engineered Products business is the culmination of the Capital Structure Improvement Plan we began in 2003,” said Robert J. Keegan, Goodyear chairman and chief executive officer. “This plan has been critical in creating a more competitive balance sheet that will now enable us to execute against our growth strategy by providing reliable access to capital throughout the economic cycle.”
Goodyear anticipates net proceeds of approximately $1.4 billion net of transaction costs, taxes and other agreed-upon payments related to employee buyouts and retirement benefits. It expects to record an after-tax gain on the sale in the third quarter of 2007.
The company expects to use the proceeds to reduce debt, address legacy obligations and invest in growing its core consumer and commercial tire businesses. Goodyear’s global strategy includes additional investment to increase high value added production capacity by 40 percent over five years and increase low cost capacity by 33 percent in existing plants as part of the strategy to drive low cost capacity to 50 percent of its total. Consistent with these global investment plans, Goodyear has agreed with the United Steelworkers to extend its commitment to invest in high value added capacity in North America beyond the previously announced three-year commitment.
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