Goodyear-Cooper Deal: Hughes Is 'Very Confident' Deal Will Close
What hasn’t changed in the last eight years? The sale price of Cooper Tire & Rubber Co. With its second acquisition deal in a decade underway, the price stands at $2.5 billion.
This week Goodyear Tire & Rubber Co. valued its acquisition of Cooper at $2.5 billion, and in June 2013 Apollo Tyres Ltd. offered the exact same amount.
Of course, that Apollo deal never came to fruition.
Cooper CEO and President Brad Hughes acknowledged the Apollo attempt Monday when addressing employees.
According to his prepared remarks for a company-wide employee meeting, Hughes told employees:
“Given what happened in 2013, some of you may be questioning whether we are confident that this deal will close. I can say that we are very confident in our expectation that the transaction will close. This is a completely different situation than 2013. One of the most appealing parts of the terms of Goodyear’s offer is that it provides a clear path to close.”
The companies note they intend to close the deal in the second half of 2021, and specifically, by Nov. 22, 2021. Both companies have the ability to extend the date to May 23, 2022.
The Apollo-Cooper deal
Here’s an over-simplified history lesson. (You can re-read the history and back-and-forth movement by searching “cooper apollo” on the MTD website.)
On June 12, 2013 Apollo and Cooper announced plans for a merger with Apollo acquiring Cooper in an all-cash sale for $2.5 billion. The deal would have created the seventh-largest tire company in the world with $6.6 billion in sales, according to 2012 figures. (Goodyear-Cooper combined represents $17.5 billion, using pre-pandemic 2019 numbers.)
Cooper stockholders approved it in September, and by Dec. 30th Cooper’s then-CEO Roy Armes announced the tiremaker was terminating the merger agreement.
In those six months there were grievances filed by the United Steelworkers, plus a lawsuit and countersuit.
In the end, Apollo’s offer to pay Cooper shareholders $35 per share for the Findlay,Ohio-based tire manufacturer didn’t come to be.
So, in 2021 Goodyear has now made its own offer — with the same $2.5 billion price tag.
Though, Cooper shareholders look to take home more than that this time around. The price per share is set at $41.75, plus shareholders will receive 0.907 shares of Goodyear common stock for every share of Cooper stock they hold. Based on the closing stock price before the announcement, the implied cash and stock value is $54.36 per share. Combined, that adds up to an equity value of $2.8 billion.
Cooper, then and now
|Net sales||$2.521 billion||$3.439 billion|
|Net income||$142.789 million||$133.565 million|
|Operating profit||$230.881 million||$240.714 million|
|Sales in the Americas||$2.170 billion||$2.486 billion*|
*In 2013 Cooper reported sales for North America; it now reports them for the Americas segment, which includes the U.S., Canada, Mexico and South America.