Goodyear has entered a definitive transaction agreement in which it will acquire Cooper in a transaction with a total enterprise value of around US$2.5bn.
Goodyear maintains the transaction will expand its product offering by combining two portfolios of complementary brands, creating a stronger US-based manufacturer with increased presence in distribution and retail channels, while combining both companies’ strengths in the light truck and SUV product segments.
The combined company will have around US$17.5bn in pro forma 2019 sales.
In the terms of the transaction, which has been approved by the boards of directors of both companies, Cooper shareholders will receive US$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 approximately US$2.8bn.
Based on Goodyear’s closing stock price on 19 February, 2021, the last trading day prior to the announcement, the implied cash and stock consideration to be received by Cooper shareholders is US$54.36 per share, representing a premium of 24% to Cooper’s closing stock price on 19 February, 2021 and a premium of 36% to Cooper’s 30-day volume weighted average price as of the close on February 19, 2021.
On closing of the transaction, Goodyear shareholders will own around 84% of the combined company and Cooper shareholders will own approximately 16%.
“This is an exciting and transformational day for our companies,” said Goodyear chairman, CEO and president, Richard Kramer.
“The addition of Cooper’s complementary tyre 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.”
The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and the approval of Cooper shareholders. The transaction is expected to close in the second half of 2021.
After closing, the combined company will be headquartered in Akron, Ohio, but Goodyear expects to maintain a presence in Findlay in the same State.
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Original source: https://corporate.goodyear.com/en-US/media/news/goodyear-to-acquire-cooper-creating-stronger-us-based%20leader-in-global-tire-industry.html