February 23rd 2021
Goodyear to acquire Cooper Tire in $2.5 billion deal
AKRON, Ohio -- The Goodyear Tire & Rubber Co. is buying competitor Cooper Tire & Rubber Co. in a $2.5 billion deal, the Ohio-based companies announced Monday.
Akron-based Goodyear, the world’s third-largest tire maker, said the acquisition will combine the companies to create a strong American manufacturing brand. Cooper, based in Findlay but originally founded in Akron, is the fifth-largest tire maker in North America with 10 factories and about 10,000 employees worldwide.
The companies had a combined $17.5 billion in sales in 2019, according to a news release.
The deal is expected to close in the second half of 2021, pending regulatory and shareholder approvals.
Cooper shareholders will receive $41.75 per share in cash and Goodyear stock. When the deal closes, Goodyear will own about 84% of the combined company and shareholders will own about 16%.
Goodyear said the deal will strengthen the company’s presence in the United States and double its presence in China, and it expects to have about $165 million in savings through “synergies” within two years of the deal being finalized.
“This is an exciting and transformational day for our companies,” said Goodyear Chairman, CEO and President Rich Kramer, “The addition of Cooper’s complementary tire product portfolio and highly capable manufacturing assets, coupled with Goodyear’s technology and industry leading distribution, provides the combined company with opportunities for improved cost efficiency and a broader offering for both companies’ retailer networks. We are confident this combination will enable us to provide enhanced service for our customers and consumers while delivering value for shareholders.”
The deal was announced along with Cooper’s fourth quarter and 2020 financial results. Cooper reported a profit of $143 million on sales of $2.5 billion for the year.
Goodyear reported a loss of $1.25 billion on revenue of $12.3 billion for fiscal year 2020, but a profitable fourth quarter.
“This transaction marks the start of a new chapter for Cooper, which we are entering from a position of strength,” said Cooper President and CEO Brad Hughes. “We believe that it represents an attractive opportunity to maximize value for our shareholders, who will receive a meaningful premium as well as the opportunity to participate in the upside of the combined company. We look forward to the opportunity to combine Cooper’s considerable talents with Goodyear’s, and to be part of a bigger, stronger organization that will be competitively well-positioned to win in the global tire industry.”