Goodyear puts chemical business up for sale
Akron, Ohio – Debt-heavy Goodyear Tire & Rubber Co. said Wednesday it is exploring the possible sale of the company’s chemical business, saying it wanted "to both enhance its financial flexibility and focus future investments on its core business."
Goodyear Chemical provides basic and high-performance polymers, antioxidants, latex and adhesive resins to customers worldwide. Its annual revenues exceed $750 million.
"Goodyear Chemical is a great business, with outstanding associates, products and customer relationships," said Robert J. Keegan, Goodyear president and CEO. "As the largest producer of synthetic rubber for tires in the world, it is delivering a strong performance during the current economic downturn," he said.
"We will consider the sale of the business to a buyer that will recognize the value and solid performance of the business, maintain Goodyear’s level of service to current customers and take associates’ needs into account," Keegan said.
Joseph Copeland, president of Goodyear Chemical, said the company’s decision to explore the business would not interfere with its daily operations.
"We are focusing on meeting customer requirements, supplying quality products and expanding our business," he said.
Goodyear Chemical's headquarters, research and development facilities, and a pilot plant are all located in Akron, Ohio. Its manufacturing facilities are in Niagara Falls, N.Y., and Beaumont, Bayport and Houston, Texas. The business has more than 1,400 associates.
The Goodyear parent company, which has retained Credit Suisse First Boston to advise on the possible divestiture, manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear employs about 92,000 people worldwide.
Last Monday, Goodyear said it would reduce shareholders' equity by $2.4 billion due to an accounting change and an increase in its pension liabilities. The company earlier this month received a waiver extension from its lenders until 4 April to restructure and extend some loan agreements into 2005.
Goodyear also obtained a commitment from JP Morgan and Citigroup to underwrite $1.3 billion in credit. The new asset-based facility would not start until existing loans are amended and would extend into 2006.
The company lost $203.6 million in 2001 and eliminated its dividend in February.
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