The Goodyear Tire & Rubber Company said that it has completed its acquisition of Cooper Tire & Rubber Company, which was announced on February 22. The merger brings together two top tyre firms with complementary product portfolios, services, and capabilities to become a stronger global tyre leader located in the United States. The combined company will provide additional options across the value spectrum, making choosing Goodyear and Cooper tyres easier for customers and consumers.
“We are excited to officially bring Goodyear and Cooper together and unite our shared focus on customers, innovation and high-quality products and solutions. 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,” said Richard J. Kramer, Goodyear chairman, chief executive officer and president.
Bringing Goodyear and Cooper together is expected to:
Enhance Goodyear's dominance in the global tyre industry:The acquisition further solidifies Goodyear's leadership position in the United States while also bolstering the company's position in other North American markets. The combination roughly doubles Goodyear's presence in China and expands the number of contacts with local automakers, while also expanding Cooper replacement tyre distribution through Goodyear's 2,500 branded retail stores.
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Combine two complementary brand portfolios to provide a comprehensive offering that spans the entire price range. The merged firm will be able to take advantage of Goodyear's original equipment and premium replacement tyre strengths, as well as Cooper's mid-tier strength, which is particularly strong in the light truck and SUV markets.
Synergies and tax benefits provide significant, immediate, and long-term financial benefits:
Within two years, Goodyear intends to achieve $165 million in cost synergies on a run-rate basis. The majority of the cost savings will come from overlapping corporate operations and increased operational efficiency. Using Goodyear's available U.S. tax advantages, the combination is estimated to create a net present value of $450 million or more. The company's cash tax payments should be reduced as a result of these tax features, allowing it to produce more free cash flow. Manufacturing-related cost savings are not included in the predicted cost synergies.
The income statement and the balance sheet are two different types of financial statements. The deal is expected to be accretive to earnings per share in the first full year after completion, while also improving Goodyear's balance sheet and enhancing its ability to de-lever.
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Boost the value of your manufacturing and distribution operations: Select Cooper facilities may be able to expand, which will improve capital efficiency and flexibility. The addition of the Cooper brand to Goodyear's global distribution network is expected to bring in additional revenue development prospects.
Increase scale to support new mobility and fleet solutions investments: Through Goodyear's ties with existing and developing original equipment manufacturers, autonomous driving system developers, new and established fleet operators, and other mobility platforms, the combined firm will offer tyre products and a comprehensive range of services in the United States.
Increase scale to support new mobility and fleet solutions investments. Through Goodyear's ties with existing and developing original equipment manufacturers, autonomous driving system developers, new and established fleet operators, and other mobility platforms, the combined firm will offer tyre products and a comprehensive range of services in the United States.
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