Cooper Tire spikes 27% after Goodyear agrees to buy it for $2.8 billion – Business Insider

This post was originally published on this site

Goodyear is splits between what Chief Technology Officer Chris Helse calls “tires and beyond-tires.”

  • Shares of Cooper Tire surged 27% on Monday on news that Goodyear Tire will acquire the company for $2.8 billion.
  • Goodyear shares traded 16% higher on the announcement. 
  • Cooper shareholders will receive $41.75 per share in cash and 0.907 shares of Goodyear common stock per Cooper share, 
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell

Shares of Cooper Tire & Rubber Company surged 27% on Monday on news that Goodyear Tire & Rubber Company is buying it for $2.8 billion, solidifying Goodyear’s spot as the reading company in the US market. 

Goodyear shares traded 16% higher. 

Cooper shareholders will receive $41.75 per share in cash and 0.907 shares of Goodyear common stock per Cooper share, amounting to $2.8 billion. This will roughly be about $54.36 per share in total, according to a release from the companies on Monday.

Goodyear shareholders will own around 84% of the combined company while Cooper shareholders will own approximately 16%. The deal is expected to close in the second half of 2021, the companies 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,” Richard J. Kramer, Goodyear chairman, chief executive officer, and, president said in a statement

The merger will expand Goodyear’s product offering and will also create a stronger American-based manufacturer with an increased presence in distribution and retail channels. In China, the merger will nearly double Goodyear’s presence. 

The combination of the two companies, both based in Ohio, will build on Goodyear’s original equipment and premium replacement tires and Cooper’s light truck and SUV segments.  

Goodyear is one of the world’s largest tire companies, doing business in 21 countries. Cooper meanwhile, is the fifth largest tire manufacturer in North America by revenue and is present in over 15 countries. 

While the tire industry is still recovering from the decline in sales during the pandemic, the combined company will have approximately $17.5 billion in pro forma 2019 sales, release published on Monday.

This post was originally published on *this site*