Goodyear Tire & Rubber Co said on Wednesday longtime CEO Richard Kramer has decided to retire next year and also unveiled initiatives to streamline its business, months after settling with activist investor Elliott.

The company's shares rose about 7% in premarket trading.

Goodyear said the board is considering both internal and external candidates to succeed Kramer, who has served as the CEO since 2010. Kramer will also step down as president and chairman.

The company will pursue strategic alternatives for its chemical business, its Dunlop brand and its Off-the-Road equipment tire business.

Goodyear expects gross proceeds in excess of $2 billion from its portfolio optimization initiatives and a doubling of segment operating margin to 10% by the fourth quarter of 2025 from about 5% currently.

Earlier this year, Goodyear said it would add three directors in agreement with Elliott Investment Management, which called for changes to strengthen the company's financial position.

Tire manufacturers have come under pressure over the past few years from cheaper Chinese rivals and face scrutiny from regulators on concerns of pollution.

(Reporting by Aishwarya Jain; Editing by Sriraj Kalluvila)