AKRON, Ohio • The largest tire company in North America and the third-largest in the world is getting bigger, as Goodyear Tire and Rubber Co. announced today it was acquiring Cooper Tire and Rubber Co. in a cash and stock deal valued at $2.8 billion.
Goodyear expects to save about $165 million within two years following the close of the transaction. The majority of the cost savings will be related to overlapping corporate functions and do not include manufacturing-related savings.
That means there are no plans to close any manufacturing plants, including the Cooper Tire plant in Tupelo, which opened in 1984 and where it employs some 1,500 workers.
Under the terms of the transaction, Cooper shareholders will receive $41.75 per share in cash and a 0.907 shares of Goodyear common stock for each Cooper share. Goodyear shareholders will own about 84% of the combined company, and Cooper shareholders will own 16%.
Founded in 1914, Cooper is the fifth-largest tire manufacturer in North America and the 13th-largest in the world with some 10,000 employees in 15 countries. Cooper products are manufactured in 10 facilities worldwide, including wholly-owned and joint venture plants. The company's portfolio of brands includes Cooper, Mastercraft, Roadmaster and Mickey Thompson.
"This is an exciting and transformational day for our companies," said Richard J. Kramer, Goodyear chairman, CEO and president. "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."
The merger will expand Goodyear's footprint in North America and double its presence in China. In addition, Goodyear, whose strength is in original equipment and premium replacement tires, will now enter the mid-tier tire market with Cooper, whose strength is in the light truck and SUV segments.
The combined company had about $17.5 billion in sales in 2019.
Brad Hughes, Cooper president and CEP said. "This transaction marks the start of a new chapter for Cooper, which we are entering from a position of strength ... 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 transaction is expected to close in the second half of this year.
After closing, the combined company will be headquartered in Akron, Ohio, but Goodyear expects to maintain a presence in Findlay, Ohio, were Cooper is based.