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AKRON, Ohio, December 13, 2010 – The Goodyear Tire & Rubber Company today announced that it has entered into agreements with Titan Tire Corporation, a subsidiary of Titan International Inc., to sell its European and Latin American farm tire businesses, including a licensing agreement that will allow Titan to manufacture and sell Goodyear-brand farm tires in Europe, Latin America and North America, for approximately $130 million, subject to post-closing conditions and adjustments.
Goodyear announced plans to explore the sale of the European and Latin American farm tire businesses in May 2009. The company sold its North American farm tire business, including a plant in Freeport, Ill., to Titan in 2005.
The Latin American portion of the transaction includes Goodyear’s Sao Paulo, Brazil manufacturing plant, property, equipment and inventories. Subject to customary closing conditions and regulatory approvals, that portion of the transaction is expected to close in the first half of 2011.
The European portion of the transaction is subject to the exercise of a put option by Goodyear following completion of a social plan related to the previously announced discontinuation of consumer tire production at its Amiens North, France manufacturing plant and required consultation with the local Works Council. Upon completion of this action, as well as customary closing conditions and regulatory approvals, the transaction will include the Amiens North plant, property, equipment and inventories.
“This transaction reinforces our focus on our core consumer and commercial tire businesses,” said Richard J. Kramer, Goodyear chairman and chief executive officer. “Our farm tire operations have been very successful for many decades. We thank our associates for their contributions,” he added.
Kramer expressed his confidence that Titan, for whom farm tires are a core business, will maintain the company’s strong relationships with Goodyear farm tire customers as well as the regions’ farming communities.
Assuming both the Latin American and European portions of the transaction are consummated, the company’s operating results, excluding any related gain or loss on the sales, are not expected to be materially affected, although the impact on segment operating income will vary by region.
Goodyear is one of the world’s largest tire companies. It employs approximately 70,000 people and manufactures its products in 56 facilities in 22 countries around the world. Its two Innovation Centers in Akron, Ohio and Colmar-Berg, Luxembourg strive to develop state-of-the-art products and services that set the technology and performance standard for the industry. For more information about Goodyear and its products, go to www.goodyear.com.
Certain information contained in this press release may constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. There are a variety of factors, many of which are beyond our control, that affect our operations, performance, business strategy and results and could cause our actual results and experience to differ materially from the assumptions, expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to: our ability to successfully complete a social plan with respect to the discontinuation of consumer tire production at our Amiens North manufacturing facility or to do so in a timely manner; our ability to realize anticipated savings and operational benefits from our cost reduction initiatives or to implement successfully other strategic initiatives; increases in the prices paid for raw materials and energy; actions and initiatives taken by both current and potential competitors; deteriorating economic conditions or an inability to access capital markets; pension plan funding obligations; work stoppages, financial difficulties or supply disruptions at our suppliers or customers; a labor strike, work stoppage or other similar event; our failure to comply with a material covenant in our debt obligations; the adequacy of our capital expenditures; potential adverse consequences of litigation involving the company; as well as the effects of more general factors such as changes in general market, economic or political conditions or in legislation, regulation or public policy. Additional factors are discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.