AKRON, Ohio — The Goodyear Tire & Rubber Company headquartered in Akron has agreed to purchase Findlay-based Cooper Tire and Rubber Company, a deal valued at $2.5 billion, the companies announced Monday.
According to Goodyear, the transaction will expand the Akron rubber tire marker’s product offering and also create a “stronger U.S.-based manufacturer with increased presence in distribution and retail channels while combining both companies’ strengths in highly profitable light trucks and SUV product segments."
“This is an exciting and transformational day for our companies,” said Richard J. Kramer, Goodyear chairman, chief executive officer and president, in a news release. “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.”
Based on the terms of the transaction, Cooper shareholders will receive $41.75 per share in cash and a fixed exchange ratio of 0.907 shares of Goodyear common stock per Cooper share for a total equity of about $2.8 billion.
The companies had approximately $17.5 billion in combined 2019 sales, according to the news release.
Upon closing of the transaction, Goodyear shareholders will own approximately 84% of the combined company, and Cooper shareholders will own approximately 16%.
Founded in 1914, Cooper, based in Findlay, Ohio, is the 5th largest tire manufacturer in North America with approximately 10,000 employees in 15 countries with 10 facilities around the globe. Its brands include Cooper, Mastercraft, Loadmaster and Mickey Thompson.
“Cooper has transformed into 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," said Brad Hughes, Cooper president & chief executive officer in a news release. "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. This transaction marks the start of a new chapter for Cooper, which we are entering from a position of strength. 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.”
The union released the following statement about the acquisition:
"The USW has been in contact with management at both companies and will ensure that union members' voices will be heard throughout the process. Our contracts with Cooper and Goodyear provide security for our jobs, earnings and benefits with protections specifically addressing successorship in case of a change in owners. We look forward to facing the challenges ahead and continuing the tradition of quality tire building in all of our communities."
After closing, the combined company will be headquartered in Akron, Ohio, but Goodyear expects to maintain a presence in Findlay. The transaction is expected to close in the second half of 2021.