1st
August 2007 - 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.
The Engineered Products
business operates 32 facilities in 12 countries and has approximately
6,300 associates. It manufactures and markets engineered rubber products
for industrial, military, consumer and transportation original equipment
end-users.
Goodyear is one of the
world's largest tire companies. The company employs about 70,000 people
and manufactures its products in more than 60 facilities in 26 countries
around the world. For more information about Goodyear go to
http://www.goodyear.com/corporate.
Source: Goodyear Press Release