AKRON, Ohio (AFX) - Goodyear Tire & Rubber Co. said Thursday it is selling operations that make reinforcing fabric for tires to Hyosung Corp. for about $80 million.
Goodyear's deal with Hyosung involves tire fabric manufacturing plants in Decatur, Ala.; Utica, N.Y.; Americana, Brazil; and Colmar-Berg, Luxembourg. The plants employ about 1,000 people and produce and treat fabric used in Goodyear tires.
Goodyear and Hyosung will have a supply agreement. Goodyear anticipates buying approximately $350 million to $400 million worth of tire cord products in the first year.
Tire cord is the material, made of nylon or various industrial fibers, placed inside tires for reinforcement. Hyosung makes tire cords, carpets, plastic bottles and nylon.
Goodyear, which expects cost savings from the deal, is focusing on its core tire business, said Robert J. Keegan, Goodyear chairman and chief executive officer.
Hyosung, based in Seoul, South Korea, operates tire cord plants in South Korea and China and generated tire cord revenue of $731 million in 2005, accounting for about 12 percent of its total sales. Hyosung hopes to boost its global tire cord market share from 25 percent to 30 percent.
Goodyear shares rose 4 cents to $13.99 in afternoon trading on the New York Stock Exchange. Goodyear shares have traded within a one-year range of $9.75 and $19.31.
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