The Goodyear Tire & Rubber Company and the Cooper Tire & Rubber Company have entered a definitive transaction agreement that will see Goodyear acquire Cooper for a total of US$2.5bn. Goodyear says the move will create a strong US manufacturer, combining both companies’ strengths with increased presence in distribution and retail channels.
“This is an exciting and transformational day for our companies,” said Richard J Kramer, Goodyear chairman, chief executive officer and president. “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. We have a great deal of respect for Cooper’s team and share a commitment to integrity, quality, agility and teamwork. We look forward to welcoming Cooper to the Goodyear family.”
Goodyear hopes that the combined company will have the opportunity to leverage the complementary nature of Goodyear’s original equipment and premium replacement tire ranges, along with the mid-tier power of the Cooper brand, which has particular strength in the light truck and SUV segments.
Goodyear noted that the deal will create opportunities for the expansion of select Cooper facilities along with an increase in capital efficiency and flexibility. Additional revenue growth opportunities will also result from the addition of the Cooper brand to Goodyear’s global distribution network.
The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and the approval of Cooper shareholders. The transaction is expected to close in the second half of 2021. Goodyear says it intends to fund the cash portion of the transaction through debt financing and has secured a committed bridge financing facility led by JPMorgan Chase Bank.
