Akron, Ohio-based Goodyear was founded in 1898 and employs about 62,000 people working in 46 facilities in 21 countries.
Findlay, Ohio-based Cooper Tire was founded in 1914 and has a 10,000-person workforce spread across 10 manufacturing facilities in 15 countries.
What Happened: The combined company will be headquartered in Akron and have approximately $17.5 billion in pro forma 2019 sales.
In a statement released by the companies, the acquisition was defined as being able to “leverage the strength of Goodyear original equipment and premium replacement tires, along with the mid-tier power of the Cooper brand, which has particular strength in the light truck and SUV segments.”
The combined company is also expected to have a stronger presence in the Chinese automotive market by creating a broader distribution for Cooper replacement tires.
Goodyear predicted the acquisition will produce approximately $165 million in run-rate cost synergies within two years after the deal closes. Goodyear shareholders will own about 84% of the combined company, while their Cooper counterparts will own about 16%.
Why It's Important: “This is an exciting and transformational day for our companies,” said Richard J. Kramer, Goodyear chairman, president and CEO. “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.
Kramer continued, saying the combination will provide enhanced service for customers, while delivering shareholder value.
Brad Hughes, Cooper president and CEO, added that the transaction “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.”
Goodyear's stock closed up 21% at $16.82 per share, while Cooper's stock closed up 29.4% at $56.64.
(Photo courtesy Goodyear)
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