Goodyear Tyre & Rubber said on Wednesday it has had completed the previously announced sale of its engineered products business to EPD, sponsored by Carlyle Partners IV, for about $1.475bn.
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“The completion of the sale of the engineered products business is the culmination of the capital structure improvement plan we began in 2003,” said Goodyear chairman and chief executive officer Robert Keegan. “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 expects to post an after-tax gain of about $1.4 billion on the sale in the third quarter of 2007and will use the money to reduce debt, address “legacy obligations” and invest in growing its core consumer and commercial tyre businesses.
Goodyear’s global strategy includes additional investment to increase high value added production capacity by 40% over five years and increase low cost capacity by 33% in existing plants as part of the strategy to drive low cost capacity to 50% of its total.
The engineered products business employs around 6,300 in 32 facilities in 12 countries making engineered rubber products for industrial, military, consumer and transportation original equipment.
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