Goodyear to pay $2.8B for Cooper
Goodyear Tire & Rubber Co. agreed to buy Cooper Tire & Rubber Co. for about $2.8 billion, strengthening its position as No. 1 in the U.S. market and almost doubling its presence in China, where auto sales are surging again.
Cooper shareholders will receive $41.75 a share in cash and 0.907 shares of Goodyear, or about $54.36 a share in total, according to a statement Monday. That’s 24 percent above Cooper’s closing price as of Feb. 19.
Goodyear shareholders will own about 84 percent of the combined tire maker. The companies anticipate savings of about $165 million over two years from the merger.
While no manufacturing jobs or plants are being eliminated initially, the companies said they see opportunities to leverage their combined production system.
With Cooper, founded in 1914, Goodyear gains the fifth-largest tire manufacturer in North America by revenue, with about 10,000 employees worldwide. In China, Ohio-based Goodyear will gain better access to local manufacturers and create broader distribution for Cooper replacement tires.
The tire industry is recovering from the pandemic slump. Last week, French tire maker Michelin predicted business will return to pre-pandemic levels in the second half of 2022.
Cooper shares jumped 24 percent to $54.31 in New York. Goodyear’s stock rose 7.5 percent.
The deal is expected to close in the second half of 2021.