Goodyear has acquired rival tire manufacturer Cooper in a transaction valued at $2.5 billion USD, the Akron, Ohio based company has announced.
Goodyear entered a definitive transaction agreement with Cooper this week, which it says will help to “create a stronger U.S.-based manufacturer with increased presence in distribution and retail channels while combining both companies’ strengths in the highly profitable light truck and SUV product segments.”
Cooper shareholders will receive $41.75 per share in cash as part of this deal, along with a fixed exchange ratio of 0.907 shares of Goodyear common stock per Cooper share. When the transaction is complete, Goodyear shareholders will own approximately 84% of the resulting combined company, while Cooper shareholders will own approximately 16%.
“This is an exciting and transformational day for our companies,” Richard J. Kramer, Goodyear chairman, chief executive officer and president, said in a prepared statement. “The addition of Cooper’s complimentary 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 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,” added Cooper CEO Brad Hughes.
Goodyear expects to achieve $165 million worth of run-rate cost synergies within the first two years of the transaction’s close date. In addition to helping it achieve cost synergies, this transaction will also double Goodyear’s presence in China and will enable the company to distribute budget-friendly Cooper replacement tires through its 2,500 global branded retail storefronts, strengthening its competitive position in the U.S. and abroad.
The merger is expected to close in the second half of 2021.
Goodyear tires are available on a range of GM products, including the Chevy Camaro ZL1 1LE, which comes standard with Goodyear Eagle F1 Supercar rubber.