Goodyear completes acquisition of Cooper Tire

MANILA: The Goodyear Tire & Rubber Company has declared the completion of its acquisition of Cooper Tire & Rubber Company, finalizing the merger agreement announced last February.

The partnership of the two leading tire companies aims to establish more comprehensive product portfolios, services, and capabilities and create a stronger US-based leader in the global tire industry. The combined company will offer more options across the value spectrum to make Goodyear- and Cooper-branded tires more accessible to the consumers.

In a statement, Goodyear Chairman President, and Chief Executive Officer Richard J. Kramer said, “We 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.”

The collaboration of Goodyear and Cooper is expected to:

• Strengthen Goodyear’s leading position in the global tire industry. Bringing the two leading tire companies together will strengthen Goodyear’s leading position in the US and help grow its position in other North American markets. In China, the partnership will nearly double Goodyear’s presence and create wider distribution for Cooper replacement tires through Goodyear’s network of 2,500 branded retail stores.
• Merge two complementary brand portfolios with a wide range of offering across the value spectrum. With its particular strength in the light truck and SUV segments, the Cooper brand can help in leveraging the strength of Goodyear original equipment and premium replacement tires.
• Offer significant, immediate, and long-term financial benefits. Goodyear targets to achieve around US$165 million in run-rate cost synergies within two years. A majority of the cost synergies will be used in meeting corporate functions and recognizing operating efficiencies. The merge of the two tire companies is also expected to generate net present value of US$450 million or more, considering Goodyear’s available US tax attributes which are expected to reduce the company’s cash tax payments. The acquisition is also expected to be gradual to earning per share within the first full year. It is also expected to improve Goodyear’s balance sheet position and enhance the company’s capability to de-lever.
• Generate additional value from production and distribution. Goodyear is looking forward to the expansion of select Cooper facilities as it is expected to increase capital efficiency and flexibility.
• Increase scale to contribute in the investments in mobility and fleet solutions. The combined company will offer tire products and wide range of services through Goodyear’s association with traditional and emerging original equipment manufacturers, autonomous driving system developers, new and established fleet operators, and other mobility platforms.

With the supporting business models, organizational structure, and distribution channels, Goodyear will combine the best of the two leading tire brands to benefit its shareholders, consumers, and employees.

Now that Goodyear has completed the acquisition, Cooper’s common stock will cease to be traded on the New York Stock Exchange.

Photos from Goodyear

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