Key Highlights:

• Goodyear plans to sell its Indian farm tyre business.

• Valuation pegged at ₹2,500–2,700 crore.

• The company holds 50% market share.

• Facing revenue decline and industry challenges.

• Part of the global restructuring strategy.

Goodyear Tyre and Rubber Company is planning to exit and sell its farm tyre business in India. According to people familiar with the matter, the US-based company has started working with strategic advisors to explore a full sale of its farm tyre operations in India. The business is estimated to be worth between ₹2,500 crore and ₹2,700 crore.

The company officially informed stock exchanges on Monday that its parent company in the US has decided to conduct a strategic review of the farm tyre segment in India. However, the company also clarified that the final outcome of this review is uncertain and there is no guarantee that a sale or any other transaction will actually happen.

Strong Market Presence in Agriculture Segment

Goodyear is currently the market leader in India’s farm tyresegment, with a 50% market share. The company manufactures specialised tyres for agricultural machinery and equipment, serving farmers and agricultural businesses across the country.

Despite its strong market position, the business has been facing difficulties in recent years due to rising raw material costs, tough competition from both local and international brands, and shifts in agricultural practices. These challenges led to a drop in revenue for Goodyear India’s farm tyre business during FY 2023-24. The expected EBITDA for FY 2024-25 stands between ₹175 crore and ₹200 crore.

Part of Global Restructuring Strategy

This development comes about a year after Goodyear sold its off-the-road (OTR) tyre business to Japanese tyre giant Yokohama for $905 million. That sale was part of a broader global restructuring plan.

In November 2023, Goodyear’s global headquarters in Akron, Ohio, announced a strategic review and portfolio optimisation strategy. The plan included considering various options for three of its business units: chemical, Dunlop brand, and OTR tyres, to streamline its operations and generate over $2 billion in proceeds. These changes were introduced under pressure from activist shareholder Elliott, who demanded more efficient operations.

The company also stated that this restructuring effort would help save $1 billion annually by the end of 2025, with a further benefit of $300 million expected within the same period. However, India was not included in the OTR sale to Yokohama.

Ownership and Valuation

Goodyear India, the publicly listed arm of the global tyre brand, currently has a market capitalisation of ₹2,114.97 crore. As of December 2024, the US parent company owns a 74% stake in the Indian subsidiary.

Industry Trends in Specialised Tyre Segments

Several tyre manufacturers around the world are taking a close look at their specialised business segments. In December, CEAT, part of the RPG Group, announced an agreement with Michelin to acquire Camso’s off-highway construction equipment bias tyres and tracks business. The $225 million all-cash deal gave CEAT control of two plants in Sri Lanka and global rights to the Camso brand.

Goodyear’s move to review and potentially sell its Indian farm tyre division aligns with these global trends, as companies look to focus more on core operations and improve financial performance.

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CMV360 Says

Goodyear's plan to exit the Indian farm tyre business reflects its global strategy to streamline operations and focus on core areas. While the final decision is pending, the move could significantly reshape the Indian agricultural tyre market, where Goodyear currently holds a dominant position with 50% market share.