Two American Ohio-based tire making giants are «joining forces». Goodyear Tire & Rubber Co. and Cooper Tire & Rubber Co. have announced that they entered a definitive agreement under which Goodyear will acquire Cooper in a transaction valued at $2.5 billion. The deal is expected to close during the second half of 2021.
In a statement released earlier, Goodyear said that the transaction will expand its product offering by «combining two portfolios of complementary brands», at the same time strengthening the company’s position with «increased presence in distribution and retail channels».
The combined sales volume of the two companies in 2019 totaled about $17.5 billion, with an about 1:5 ratio in favor of Goodyear. At the same time, the acquisition price of Cooper ($1.5 B) virtually equals its annual turnover for 2019 ($2.450 B).
Under the terms of the transaction, which has been approved by the boards of directors of both companies, Cooper shareholders will receive $41.75 per share in cash and a fixed exchange ratio of 0.907 shares of Goodyear common stock per Cooper share for a total equity value of approximately $2.8 billion. Upon closing of the transaction, Goodyear shareholders will own approximately 84% of the combined company, and Cooper shareholders will own approximately 16%.
Cooper has 10,000 employees working in 15 countries worldwide. Cooper products are manufactured at 10 facilities around the globe, including wholly-owned and joint-venture plants, such as production facilities in Mexico and Vietnam (Sailun). The company’s portfolio of brands includes Cooper, Avon, Hercules, Mastercraft, Starfire, Roadmaster, and Mickey Thompson.
For Goodyear, the significantly larger company of the two, this transaction nearly doubles its presence in China and increases the number of its relationships with local automakers, comments the Shina Guide technical expert. Cooper, on the other hand, will get access to more than 2,500 branded retail stores, including for selling its replacement tires.