Goodyear to acquire Avon Tyres' parent company Cooper Tire & Rubber
Akron, Ohio headquartered Goodyear Tire & Rubber is to acquire the Cooper Tire & Rubber Company (Findlay, Ohio) - since 1997 the parent company of the British Cobra custom tyres manufacturer Avon Tyres.
The two corporations have entered a definitive transaction agreement under which Goodyear will acquire Cooper in a deal with a total enterprise value of approximately $2.5bn.
"The transaction will expand Goodyear's product offering by combining two portfolios of complementary brands. It will also create a stronger U.S.-based manufacturer with increased presence in distribution and retail channels while combining both companies' strengths in the highly profitable light truck and SUV product segments. The combined company will have approximately $17.5bn in pro forma 2019 sales.
"Under the terms of the transaction, 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 approximately $2.8bn.
"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 said to be the fifth largest tyre manufacturer in North America by revenue, with approximately 10,000 employees working in 15 countries worldwide. Cooper products are manufactured in ten facilities around the globe, including wholly-owned and joint venture plants. The company's portfolio of brands includes Cooper, Mastercraft, Roadmaster and Mickey Thompson.
Avon's Cobra Chrome, the latest
iteration of Avon's popular Cobra custom tyre series, was launched at
the AMD World Championship of Custom Bike Building at INTERMOT in
October 2018.
Acquisition of one of its long-time competitors "further strengthens Goodyear's leading position in the U.S., while significantly growing its position in other North American markets. In China, the combination nearly doubles Goodyear's presence and increases the number of relationships with local automakers, while creating broader distribution for Cooper replacement tyres through Goodyear's network of 2,500 branded retail stores.
"Goodyear intends to fund the cash portion of the transaction through debt financing and has secured a committed bridge financing facility led by JPMorgan Chase."
The Avon factory at Melksham, England, is one of the smallest and oldest in the Cooper network. Avon has been on its site since 1890, where it is believed to currently employ some 400 people; more than 300 people were laid off in 2018.
A Goodyear NA spokesperson told IDN: "We haven't yet begun the integration planning process, so it would be premature to comment on any aspect of the combined business beyond what we've announced."
