Goodyear buys Cooper Tire

The Goodyear Tire & Rubber Co., based in Akron, plans to buy Cooper Tire & Rubber Co. in a $2.8 billion deal expected to close in the second half of 2021. In buying Cooper, Goodyear — the third-largest tire maker in the world — will increase sales and save costs in the brutal tire-making business where company size has become increasingly important. Cooper, the 13th-largest tire company in the world, employs 1,650 in Findlay. The Findlay factory appears to be safe at least for a couple of years. That may not be the case, however, for some positions at Cooper's headquarters offices in Findlay. "Today's announcement did not contemplate any loss of manufacturing jobs or the elimination of any manufacturing plants," said Richard J. Kramer, Goodyear chairman and chief executive officer. Cost savings are anticipated elsewhere. "We're looking at a combination of elimination of overlapping corporate functions," Kramer said. "The ability to combine research and development functions." Tire industry observers for years have said Cooper would likely be a buyout target, given the importance of company size in the competitive tire industry. Findlay Mayor Christina Muryn said she was not surprised by Monday's news. "Cooper has been positioning itself to merge with other organizations for a number of years now. I'm excited to see Goodyear stepping up and showing interest in Cooper," Muryn said. "It certainly will be a transition for Findlay for the next five, 10 years, as they figure out how to best merge both organizations. But overall, Findlay will work with it and find ways to continue to support our local economy and the future of Cooper and Goodyear as they move forward." The acquisition of Cooper will expand Goodyear's product offerings and increase its distribution and retail channels in the highly profitable light truck and SUV product segments. Under the terms of the deal, which has been approved by the boards of directors of both companies, 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 value of about $2.8 billion. Based on Goodyear's closing stock price on Feb. 19, 2021, the last trading day prior to the announcement, the implied cash and stock consideration to be received by Cooper shareholders is $54.36 per share. This represents a premium of 24% to Cooper's closing stock price on Feb. 19, 2021, and a premium of 36% to Cooper's 30-day volume weighted average price as of the close on Feb. 19, 2021. 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 is the fifth-largest tire manufacturer in North America by revenue, with about 10,000 employees working in 15 countries worldwide. Cooper products are manufactured in 10 facilities around the globe, 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," Kramer said. "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." "We have a great deal of respect for Cooper's team and share a commitment to integrity, quality, agility and teamwork. We look forward to welcoming Cooper to the Goodyear family," Kramer said. Brad Hughes, Cooper president and chief executive officer, said he is proud of Cooper Tire's accomplishments over the years. "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," Hughes said. "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." Wilin: 419-427-8413