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One of the world’s leading tyre makers, Goodyear Tire & Rubber Company has announced its acquisition of Cooper Tire & Rubber Company, one of USA’s leading replacement tyre manufacturers. The acquisition is going to cost Goodyear USD 2.5 billion. This transaction will put Goodyear in a great position in terms of product offering. Now they will have a vast and varied portfolio of tyres and related products. The deal will also mean that now with the combined capabilities of both the companies, Goodyear will have a strong presence in the highly profitable light truck and SUV product segments. The combined company will have approximately USD 17.5 billion in pro forma 2019 sales.
According to the terms of the transaction, which has been approved by the Boards of Directors of both companies, Cooper shareholders will get USD 41.75 per share in cash. In addition to this, they will also get a fixed exchange ratio of 0.907 shares of Goodyear common stock per Cooper share for a total equity of about USD 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%.
Speaking on the development, Richard J. Kramer, CEO & President, Goodyear, said that this is a very exciting and transformational day for both companies. He was of the opinion that Goodyear’s technology and Cooper’s highly capable manufacturing assets together will result in better cost efficiency and offer enhanced service for our customers. He further added, all this will deliver value for shareholders too.
Also present on the occasion was Brad Hughes, CEO & President, Cooper. He expressed his gratitude to all Cooper’s employees for their contributions and commitment, and the company’s achievements over the past 107 years. He called the latest transaction as the new beginning for Cooper and its employees.
The acquisition will give many benefits to both companies as together they will be a leader in the industry. It will provide significant, immediate and long-term financial benefits. Now Goodyear will have the opportunity to create additional value from manufacturing and distribution.
About Goodyear Tire & Rubber Company:
Goodyear ranks amongst the world’s top 5 tyre makers. With manufacturing facilities spanning over 20 countries, the company employs about 62K people. Goodyear has two innovation centres, one each in America and Europe.
About Cooper Tire & Rubber Company:
Cooper’s specialty is in the designing, manufacturing and marketing and sales of passenger cars, medium truck, light truck, motorcycle and racing tyres. The company’s operations span across the globe with a presence in 15 countries. It is headquartered in Findlay, Ohio.
