Goodyear Tire & Rubber Company has announced that it has completed its
acquisition of Cooper Tire & Rubber Company, finalising the merger
agreement made public on February 22, 2021.
HERE TO READ: GOODYEAR TO ACQUIRE COOPER TIRE & RUBBER CO IN US $ 2.5
combination unites two leading tire companies with complementary product
portfolios, services and capabilities to create a stronger U.S.-based leader in
the global tire industry. The combined company will offer more options across
the value spectrum making it easier for customers and consumers to choose
Goodyear- and Cooper-branded tyres.
are excited to officially bring Goodyear and Cooper together and unite our
shared focus on customers, innovation and high-quality products and solutions.
This combination strengthens Goodyear’s ability to serve more consumers
globally and provides increased scale to support greater investments in new
mobility and fleet solutions,” said Richard J. Kramer, Goodyear chairman, chief
executive officer and president.
Goodyear and Cooper together is expected to:
Strengthen Goodyear’s leading position in global tyre industry. The acquisition
further strengthens Goodyear’s leading position in the U.S., while
significantly growing its position in other North American markets. In China,
the combination nearly doubles Goodyear’s presence and increases the number of
relationships with local automakers, while creating broader distribution for
Cooper replacement tires through Goodyear’s network of 2,500 branded retail
Combine two complementary brand portfolios with a comprehensive offering across
the value spectrum. The combined company will have the opportunity 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.
Provide significant, immediate and long-term financial benefits:
Synergies and Tax Benefits. Goodyear expects to achieve approximately $165
million in run-rate cost synergies
within two years. The majority of the cost synergies will be related to
overlapping corporate functions and realizing operating efficiencies. In
addition, the combination is expected to generate net present value of $450
million or more by utilizing Goodyear’s available U.S. tax attributes. These
tax attributes are expected toreduce the company’s cash tax payments,
positioning it to generate additional free cash flow. The expected cost
synergies do not include manufacturing-related savings.
Earnings and Balance Sheet. The acquisition is expected to be accretive to
earnings per share within the first full year following closing, modestly
improves Goodyear’s balance sheet position and enhances the company’s ability
Create Additional Value from Manufacturing and Distribution. Opportunities for
expansion of select Cooper facilities are expected toincrease capital
efficiency and flexibility. Additional revenue growth opportunities are
expected toresult from the addition of the Cooper brand to Goodyear’s global
Increase Scale to Support Investments in New Mobility and Fleet Solutions. As
an industry leader in the U.S., the combined company will offer tire products
and a broad selection of services through Goodyear’s relationships with
traditional and emerging original equipment manufacturers; autonomous driving
system developers; new and established fleet operators; and other mobility
complementary business models, organizational structures and distribution
channels, Goodyear will integrate the best of Goodyear and Cooper in order to
benefit its shareholders, customers, consumers and employees. As a result of
the closing, Cooper’s common stock will cease to be traded on the New York
Stock Exchange, a company press release said.