The Goodyear-Cooper deal has cleared another regulatory hurdle, and at the same time Goodyear Tire & Rubber Co. says it will offer $1.45 billion in senior notes to fund the cash portion of the acquisition.
In a filing with the U.S. Securities and Exchange Commission, Goodyear says on May 10 the waiting period required by the Hart-Scott-Rodino Antitrust Improvement Acts of 1976 expired. Goodyear notes the acquisition of Cooper Tire & Rubber Co. "remains subject to certain regulatory approvals and customary closing conditions."
Mergers are reviewed by both the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Justice Department. The Hart-Scott-Rodino Antitrust Improvements Act requires companies to file paperwork about mergers — usually for those valued at more than $92 million — and it creates waiting periods before deals can close.
The FTC says, "If the waiting period expires or is terminated (early), the parties are free to close their deal."
The combined financial picture
As part of its filing, the companies present financial figures that show what the combined entity might look like — and what it would have looked like had the merger been effective on Jan. 1, 2020. Taking "transaction adjustments" into effect, the combined Goodyear-Cooper company would have recorded net sales of $14.8 billion in 2020, and a net income loss of $1.4 billion.
The combined company's assets at the end of 2020 would have exceeded $20.5 billion, with total liabilities of more than $16.4 billion.
For the first quarter of 2021, the combined net sales would have totaled more than $4.1 billion. Both tiremakers reported a profit in the first quarter, and combined that net income would be $37 million.
Senior notes
On May 13 Goodyear says it has begun an offering of senior notes worth $1.45 billion.
"Goodyear intends to use the net proceeds from this offering, together with cash on hand and borrowings under its revolving credit facility, to fund the cash portion of the consideration for the acquisition of Cooper Tire & Rubber Company and to pay fees and expenses in connection with such acquisition and the other transactions related thereto."
