GOODYEAR TIRE RUBBER CO OH

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The consummation of the sale of our OTR tire business to The Yokohama Rubber Company is subject to closing conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all. Failure to complete the sale in a timely manner or at all could have adverse effects on us.

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On July 22, 2024, Goodyear and The Yokohama Rubber Company (the “Buyer”) entered into a Share and Asset Purchase Agreement (the “Agreement”) with respect to the sale of our OTR tire business (the “Business”) to the Buyer (the “Transaction”).

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The Transaction is subject to the satisfaction of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; the making or obtaining of certain antitrust approvals; the absence of any law or order enjoining or otherwise prohibiting the Transaction; the absence of any law or order arising under any antitrust law that expressly imposes a requirement on the Buyer or any of its affiliates to: (a) sell, transfer or otherwise dispose of any assets, rights, products or businesses of Buyer or any of its affiliates (other than, following the closing of the Transaction (the "Closing"), the Business), (b) sell, transfer or otherwise dispose of any assets, rights, products or businesses of the Business, or (c) take any other action of a type not described in either (a) or (b) with respect to any of the assets, rights, products or businesses of Buyer and its affiliates (including, following the Closing, the Business), unless, in the case of any action described in (b) or (c), any such action would not and would not reasonably be expected to result in a material adverse effect on (1) Buyer and its subsidiaries, taken as a whole (including the reasonably anticipated benefits (financial or otherwise) to Buyer of the Transaction and assuming that Buyer and its subsidiaries, taken as a whole, are the same size as the Business, taken as a whole), or (2) the Business, taken as a whole (a “Burdensome Action”); the accuracy of the representations and warranties of the other party; the compliance of each party with its covenants in all material respects; and the absence of a material adverse effect with respect to the Business.

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The Agreement also contains customary termination rights, including if the Closing has not occurred on or prior to July 22, 2025 (as it may be extended, the "Outside Date"), subject to two three-month extension periods, at the option of either us or the Buyer, if certain regulatory conditions to Closing have not been satisfied.

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The Buyer will also be required to pay or cause to be paid to us a fee of $47.5 million (the “Buyer Termination Fee”) if the Agreement is validly terminated by either us or the Buyer due to a failure to receive certain antitrust approvals on or prior to the Outside Date or due to a government order or action that arises as a result of an antitrust law that permanently makes illegal or prevents the consummation of the Transaction or by the Buyer due to a government order or action that arises as a result of an antitrust law that imposes a Burdensome Action on the Buyer. The Buyer Termination Fee may not be sufficient to cover all of the expenses we incurred in connection with the Transaction or the losses associated with failing to consummate the Transaction.

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If the Closing does not occur, our operating results, financial condition and liquidity may be materially adversely affected. Without realizing any of the benefits of having completed the Transaction, we will be subject to a number of risks, including the following:

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the market price of Goodyear common stock could decline to the extent that the current market price reflects a market assumption that the Transaction will be completed;

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if the Agreement is terminated and we seek another buyer for the Business, our shareholders cannot be certain that we will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms of the Agreement;

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time and resources committed by our management to matters relating to the Transaction could otherwise have been devoted to pursuing other beneficial opportunities for us;

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we may experience negative reactions from the financial markets or from our customers, suppliers or employees;

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we will be required to pay our costs relating to the Transaction, such as legal, accounting and financial advisory fees, whether or not the Transaction is completed; and

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litigation related to any failure to complete the Transaction or related to any enforcement proceeding commenced against us to perform our obligations pursuant to the Agreement.

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Similarly, delays in the completion of the Transaction could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with uncertainty about completion of the Transaction.

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The Transaction may disrupt our current and future plans or operations.

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The Agreement also contemplates that, at the Closing, Goodyear and the Buyer (or their respective affiliates) will enter into (a) a product supply agreement, pursuant to which we will, or will cause our affiliates to, supply to the Buyer or its affiliates, certain tire products for an initial period of up to 5 years from Closing, subject to an exit and asset relocation plan to be mutually agreed upon by the parties pursuant to which, beginning no earlier than the 2nd anniversary of the Closing, the production of those tire products will transition to Buyer’s facilities, and (b) a transition services agreement, pursuant to which we will provide certain transition services to the Buyer for the Business for a specified period from the Closing. The Buyer will reimburse us for certain costs incurred under the product supply agreement and the transition services agreement during their respective terms.

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There can be no assurance that we will be able to successfully separate the Business or otherwise fully realize the expected benefits of the Transaction. Difficulties in separating the Business may result in us performing differently than expected, in operational challenges or in unabsorbed overhead and other costs, especially during the implementation of the exit and asset relocation plan contemplated by the product supply agreement. The separation of the Business may result in material challenges, including the diversion of management’s attention from ongoing business concerns; retaining key management and other employees; retaining or attracting business and operational relationships; the possibility of faulty assumptions underlying expectations regarding the separation process and associated expenses; separating corporate and administrative infrastructures, including information technology, manufacturing and other systems; coordinating these activities in geographically dispersed locations; as well as potential unknown liabilities or unforeseen expenses relating to the separation or any delays in separation activities.