AKRON — Goodyear, the No. 3 tire maker with $13.7 billion in global tire sales in 2019, entered an agreement to purchase the Cooper Tire & Rubber Co. The agreement between the U.S.-based tire makers was announced Monday morning.
Goodyear said the cost of the transaction, which has been approved by the Board of Directors of both companies, is approximately $2.5 billion. Cooper ranks as the No. 13 tire maker globally, with 2019 sales of $2.75 billion.
In a news release issued before the opening of business on Feb. 22, Goodyear said the combined company will have approximately $17.5 billion in sales, based on 2019 figures.
Under terms of the agreement, Cooper shareholders will receive $41.75 per share in cash and a fixed exchange ration of 0.907 shares of Goodyear common stock per Cooper share. Goodyear said the the implied cash and stock value that Cooper shareholders will receive is $54.36 per share, representing a 24% premium on Cooper stock, based on the close of business Feb. 19.
Cooper, founded in 1914, has approximately 10,000 employees in 15 countries worldwide. It operates 10 facilities around the globe, including wholly-owned and joint venture plants. The company's brands includes Cooper, Mastercraft, Roadmaster and Mickey Thompson.
Goodyear chairman, CEO and president Rich Kramer called it "a transformational day" for both companies.
"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."
Brad Hughes, Cooper president and chief executive officer, called the day the start of a "new chapter" and said that Cooper has become "a dynamic, consumer-driven organization that has balanced traditional and emerging channels to increase demand for our products, while updating and effectively leveraging our global manufacturing footprint. I am extremely proud of what our team has accomplished over the past 107 years and am grateful to our talented employees for their contributions and commitment.
"We believe that it represents an attractive opportunity to maximize value for our shareholders, who will receive a meaningful premium as well as the opportunity to participate in the upside of the combined company. We look forward to the opportunity to combine Cooper's considerable talents with Goodyear's, and to be part of a bigger, stronger organization that will be competitively well-positioned to win in the global tire industry."
This is a developing story. Check back with Tire Business for updates throughout the day.