The Goodyear Tire & Rubber Company announced that it has completed its acquisition of Cooper Tire & Rubber Company, finalizing the merger agreement made public on February 22.
The combined company will offer more options across the value spectrum making it easier for customers and consumers to choose Goodyear- and Cooper-branded tires, according to a release.
“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,” said Richard J. Kramer, Goodyear chairman, chief executive officer and president.
Goodyear noted that the acquisition further strengthens its 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 stores.
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.
With this acquisition, 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 to reduce the Goodyear Completes Acquisition of Cooper company’s cash tax payments, positioning it to generate additional free cash flow. The expected cost synergies do not include manufacturing-related savings.
Additionally, opportunities for expansion of select Cooper facilities are expected to increase capital efficiency and flexibility. Additional revenue growth opportunities are expected to result from the addition of the Cooper brand to Goodyear’s global distribution network.
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 platforms.
As a result of the closing, Cooper’s common stock will cease to be traded on the New York Stock Exchange.
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