Goodyear Completes Acquisition of Cooper
Goodyear Tire & Rubber Co. has finalized its acquisition of Cooper Tire & Rubber Co. "The combination unites two leading tire companies with complementary product portfolios, services and capabilities to create a stronger U.S.-based leader in the global tire industry," say Goodyear officials.
“We are excited to officially bring Goodyear and Cooper together and unite our shared focus on customers, innovation and high-quality products and solutions," says Goodyear Chairman, CEO and President Rich Kramer. "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."
In a June 7 statement, Goodyear officials said that the acquisition strengthens the Akron, Ohio-based tiremaker's 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."
In addition, Goodyear officials said "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."
And "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.
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 company’s cash tax payments, positioning it to generate additional free cash flow. The expected cost synergies do not include manufacturing-related savings."
As a result of the closing of the acquisition, Cooper will no longer be traded on the New York Stock Exchange.
Goodyear announced its intention to acquire Cooper on Feb. 22. At the time, the transaction was valued at $2.5 billion.