Move to Reduce Debt : Goodyear to Sell Oil Unit to Exxon for $650 Million

AKRON, Ohio — Goodyear Tire & Rubber Co. agreed Monday to sell its Celeron Corp. oil and gas unit to Exxon Corp. for $650 million to reduce debt incurred in fighting off last year’s takeover bid by Sir James Goldsmith.

Celeron’s holdings in California and adjacent state and federal waters will boost Exxon’s proven reserves by the equivalent of more than 100 million barrels of oil. Houston-based Exxon is the world’s biggest oil company.

Goodyear, the world’s largest tire maker, said in early November that it would sell Celeron to help finance its defensive restructuring after the Anglo-French financier built up an 11.5% stake in the Akron-based firm. He later made a $4.7-billion bid for the company.

Goodyear said the sale does not include its All-American pipeline system, a 30-inch pipeline designed to transport crude oil from onshore and offshore California fields to refineries in the Gulf Coast and other areas.

Robert Mercer, Goodyear chairman, said in a statement that the sale “represents another major step in the company’s restructuring program, the proceeds of which will be used to reduce debt.”

Randall Meyer, president of Exxon Co., U.S.A., said the acquisition represents the latest purchase in Exxon’s continuing program to acquire quality oil and gas properties as part of its long-term strategy.

“With the Celeron purchase, Exxon Co., U.S.A. will have spent more than $1.5 billion since early 1984 to buy over 300 million barrels of domestic oil and gas reserves,” Meyer said in a statement.

Goodyear’s stock closed up $2.75 at $76 on the New York Stock Exchange. Exxon was up $2.875 at $98.25.

“They paid a reasonable price,” said Shearson Lehman Bros. oil analyst Sanford Margoshes.