Both stocks rallied on the deal with shares of Cooper hitting a record.
|GT||GOODYEAR TIRE & RUBBER CO.||20.74||+0.93||+4.69%|
“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" said Richard J. Kramer, Goodyear chairman, chief executive officer and president, in the deal's announcement.
The combined company will have approximately $17.5 billion in pro forma 2019 sales" the company noted.
Cooper, founded in 1914, is the 5th largest tire maker in North America based on revenue. The company has about 10,000 employees in 15 countries. In addition to the Cooper brand, it also owns Mastercraft, Roadmaster and Mickey Thompson. For Goodyear, the bigger company, the deal will nearly double its presence in China.
Cooper will get access to Goodyear's 2,500 retail locations. The companies had combined sales of $19.5 billion in 2019. By combining, the new company would save about $165 million within two years of closing and free up cash in tax savings. It will also bring an array of tire brands together under one roof, including Goodyear's Dunlop and Kelly brands, and Cooper's Mastercraft and Mickey Thompson brands.
The company will be based in Goodyear's home of Akron, Ohio. Cooper's current headquarters is 132 miles away in Findlay, Ohio, where the company will continue to maintain a presence.
The Associated Press contributed to this report.