GENCORP <GY> TO SELL GENERAL TIRE
Gencorp Inc and Continental AG of
Hanover, West Germany, jointy announced they signed an
agreement for Continental to buy Gencorp's General Tire Inc
subsidiary for 650 mln dlrs in cash.
    Under the agreement the companies said Continental will
acquire General Tire, including its related domestic and
foreign operations, and Gencorp will retain liability for the
medical benefits of retired General Tire employees who retired
on or before November 30, 1984.
    The sale is expected to be completed on or before November
one and is subject to meeting certain conditions.
    Continental is Europe's second largest tire producer. Last
year, the company had sales of 2.6 billion dlrs, with 1.9
billion dlrs generated by its tire operations.
    Last year, General Tire had operating profits of 79 mln
dlrs on sales of 1.1 billion dlrs, and Gencorp had operating
profits of 130 mln dlrs on sales of 3.1 billion dlrs.
    GenCorp spokesman Rip Tilden said the company will retain
about 100 mln dlrs in liability for its former General Tire
employees under the agreement.
    Tilden said Gencorp will use the proceeds from the sale to
reduce its 1.5 billion dlr debt.
    In April, GenCorp sucessfully thwarted a takeover by a
partnership formed by AFG Industries Inc <AFG> and Wagner and
Brown with a restructuring program that included the purchase
of up to 54 pct, or 12.5 mln shares, of its common at 130 dlrs
a share for a total of 1.6 billion dlrs
    As part of the restructuring, GenCorp also said it planned
to sell its tire business, the bottling operations of its RKO
General Inc subsidiary, and RKO's remaining broadcast
properties to focus on the company's aerospace and automotive
components businesses.
   
    Tilden said Gencorp expects to realize about 850 mln dlrs
in after tax proceeds by the end of 1987 as a result of sale of
several pieces of the nonbroadcast assets of the company,
including general tire.
    "The price paid for General tire would not cause us to
reevaluate that estimate," said Tilden.
    General Tire employs 10,000 people worldwide and has four
tire manufacturing plants in the U.S. and one in Canada.
    In a statemnet, A. William Reynolds, GenCorp chairman said
the sale of General Tire "represents a critical accomplishment
in our plan to restructure GenCorp."
   
    Reynolds also said GenCorp's previously announced sale of
its other businesses are "proceeding satisfactorily."
    Among the pieces of Gencorp's empire that remain to be sold
are its RKO bottling operations. GenCorp agreed to sell RKO's
KHJ-TV station to Walt Disney Co <DIS> for
217 mln dlrs. That deal awaits approval by the Federal
Communications Commission. GenCorp also received 257 dlrs after
tax from the sale of RKO's WOR-TV.
   
 Reuter
