AKRON, Ohio and FINDLAY, Ohio, Feb. 22,
2021 /PRNewswire/ -- The Goodyear Tire & Rubber
Company (Nasdaq: GT) and Cooper Tire & Rubber Company (NYSE:
CTB) today announced that they have entered a definitive
transaction agreement under which Goodyear will acquire Cooper in a
transaction with a total enterprise value of approximately
$2.5 billion. 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 $17.5
billion 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 $2.8 billion. Based on Goodyear's closing stock
price on February 19, 2021, the last
trading day prior to the announcement, the implied cash and stock
consideration to be received by Cooper shareholders is $54.36 per share, representing a premium of 24%
to Cooper's closing stock price on February
19, 2021, and a premium of 36% to Cooper's 30-day volume
weighted average price as of the close on February 19, 2021. 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 the 5th-largest tire manufacturer in
North America by revenue with
approximately 10,000 employees working in 15 countries worldwide.
Cooper products are manufactured in 10 facilities around the globe,
including wholly-owned and joint venture plants. The company's
portfolio of brands includes Cooper, Mastercraft, Roadmaster and
Mickey Thompson.
"This is an exciting and transformational day for our
companies," said Richard J. Kramer,
Goodyear chairman, chief executive officer and president. "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."
Kramer added, "We have a great deal of respect for Cooper's team
and share a commitment to integrity, quality, agility and teamwork.
We look forward to welcoming Cooper to the Goodyear family."
Brad Hughes, Cooper president
& chief executive officer, added, "Cooper has transformed into
a dynamic, consumer-driven organization that has balanced
traditional and emerging channels to increase demand for our
products, while updating and effectively leveraging our global
manufacturing footprint. I am extremely proud of what our team has
accomplished over the past 107 years and am grateful to our
talented employees for their contributions and commitment. This
transaction marks the start of a new chapter for Cooper, which we
are entering from a position of strength. We believe that it
represents an attractive opportunity to maximize value for our
shareholders, who will receive a meaningful premium as well as the
opportunity to participate in the upside of the combined company.
We look forward to the opportunity to combine Cooper's considerable
talents with Goodyear's, and to be part of a bigger, stronger
organization that will be competitively well-positioned to win in
the global tire industry."
Compelling Strategic and Financial Benefits
- Strengthens Leadership Position in Global Tire Industry.
The transaction 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 tires through
Goodyear's network of 2,500 branded retail stores.
- Combines Two Complementary Brand Portfolios with a
Comprehensive Offering Across the Value Spectrum. The combined
company will have the opportunity to leverage the strength of
Goodyear original equipment and premium replacement tires, along
with the mid-tier power of the Cooper brand, which has particular
strength in the light truck and SUV segments. Together, these
brands have the opportunity to deliver a more complete offering to
aligned distributors and retailers.
- Provides Significant, Immediate and Long-Term Financial
Benefits.
-
- Synergies and Tax Benefits. Goodyear expects to achieve
approximately $165 million in run-rate cost synergies within
two years following the close of the transaction. The majority of
the cost synergies will be related to overlapping corporate
functions and realizing operating efficiencies. In addition, the
combination is expected to generate net present value of
$450 million or more by utilizing
Goodyear's available U.S. tax attributes. These tax attributes will
reduce the company's cash tax payments, positioning it to generate
additional free cash flow. The expected cost synergies from this
transaction do not include manufacturing-related savings.
- Earnings and Balance Sheet. The transaction is
immediately accretive to earnings per share, modestly improves
Goodyear's balance sheet position and enhances the company's
ability to de-lever.
- Opportunity to Create Additional Value from Manufacturing
and Distribution. Opportunities for expansion of select Cooper
facilities will increase capital efficiency and flexibility.
Additional revenue growth opportunities will result from the
addition of the Cooper brand to Goodyear's global distribution
network.
- Increases Scale to Support Investments in New Mobility and
Fleet Solutions. As an industry leader in the U.S., the
combined company will offer tire products and a broad selection of
services through Goodyear's relationships with traditional and
emerging original equipment manufacturers; autonomous driving
system developers; new and established fleet operators; and other
mobility platforms.
Timing, Approvals and Financing
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.
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 Bank, N.A.
Focused on a Successful Integration
With complementary business models, organizational structures
and distribution channels, Goodyear and Cooper expect to execute a
successful integration that captures the full benefits of the
combination. The companies will prepare for integration focused on
continuity of manufacturing, operations and customer service.
After closing, the combined company will be headquartered in
Akron, Ohio, but Goodyear expects
to maintain a presence in Findlay,
Ohio.
Advisors
Lazard is serving as lead financial advisor, J.P. Morgan
Securities LLC is serving as financial advisor and Paul, Weiss,
Rifkind, Wharton & Garrison LLP and Covington and Burling LLP
are serving as legal advisors to Goodyear. Goldman Sachs & Co.
LLC is serving as the exclusive financial advisor and Jones Day is serving as legal advisor to
Cooper.
Conference Call and Webcast
Goodyear and Cooper will hold a joint conference call at
8:00 a.m. ET today to discuss the
transaction. The conference call will be available via live webcast
on the Goodyear investor relations website:
http://investor.goodyear.com.
Those participating via telephone should call either
800-895-3361 or 785-424-1062 before 8:00
a.m. ET and provide the Conference ID "Goodyear." A taped
replay will be available by calling 800-925-9348 or 402-220-5381.
The replay will also remain available on the Goodyear website.
Additional information regarding the transaction can be found on
https://GoodyearCooper.transactionfacts.com.
About The Goodyear Tire & Rubber Company
Goodyear is one of the world's largest tire companies. It
employs about 62,000 people and manufactures its products in 46
facilities in 21 countries around the world. Its two Innovation
Centers in Akron, Ohio, and
Colmar-Berg, Luxembourg, strive to
develop state-of-the-art products and services that set the
technology and performance standard for the industry. For more
information about Goodyear and its products, go to
www.goodyear.com/corporate. GT-FN
About Cooper Tire & Rubber Company
Cooper Tire & Rubber Company is the parent company of a
global family of companies that specializes in the design,
manufacture, marketing and sale of passenger car, light truck,
medium truck, motorcycle and racing tires. Cooper's headquarters is
in Findlay, Ohio, with
manufacturing, sales, distribution, technical and design operations
within its family of companies located in 15 countries around the
world. For more information on Cooper, visit www.coopertire.com,
www.facebook.com/coopertire or www.twitter.com/coopertire.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements generally include statements
regarding the potential transaction between The Goodyear Tire &
Rubber Company ("Goodyear") and Cooper Tire & Rubber Company
("Cooper"), including any statements regarding the expected
timetable for completing the potential transaction, the ability to
complete the potential transaction, the expected benefits of the
potential transaction (including anticipated annual run-rate
operating and other cost synergies and anticipated accretion to
return on capital employed, free cash flow, and earnings per
share), projected financial information, future opportunities, and
any other statements regarding Goodyear's and Cooper's future
expectations, beliefs, plans, objectives, results of operations,
financial condition and cash flows, or future events or
performance. These statements are often, but not always, made
through the use of words or phrases such as "anticipates,"
"expects," "intends," "plans," "targets," "forecasts," "projects,"
"believes," "seeks," "schedules," "estimates," "positions,"
"pursues," "may," "could," "should," "will," "budgets," "outlook,"
"trends," "guidance," "focus," "on schedule," "on track," "is
slated," "goals," "objectives," "strategies," "opportunities,"
"poised," "potential" and similar expressions. All such
forward-looking statements are based on current expectations of
Goodyear's and Cooper's management and therefore involve estimates
and assumptions that are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from
the results expressed in the statements. Key factors that could
cause actual results to differ materially from those projected in
the forward-looking statements include the ability to obtain the
requisite Cooper stockholder approval; uncertainties as to the
timing to consummate the potential transaction; the risk that a
condition to closing the potential transaction may not be
satisfied; the risk that regulatory approvals are not obtained or
are obtained subject to conditions that are not anticipated by the
parties; the effects of disruption to Goodyear's or Cooper's
respective businesses; the effect of this communication on
Goodyear's or Cooper's stock prices; the effects of industry,
market, economic, political or regulatory conditions outside of
Goodyear's or Cooper's control; transaction costs; Goodyear's
ability to achieve the benefits from the proposed transaction,
including the anticipated annual run-rate operating and other cost
synergies and accretion to return on capital employed, free cash
flow, and earnings per share; Goodyear's ability to promptly,
efficiently and effectively integrate acquired operations into its
own operations; unknown liabilities; and the diversion of
management time on transaction-related issues. Other important
factors that could cause actual results to differ materially from
those in the forward-looking statements are set forth under the
heading "Risk Factors" on the companies' Annual Reports on Form
10-K and in subsequent filings with the U.S. Securities and
Exchange Commission. Other unpredictable or unknown factors not
discussed in this communication could also have material adverse
effects on forward-looking statements. Goodyear assumes no
obligation to update any forward-looking statements, except as
required by law. Readers are cautioned not to place undue reliance
on these forward-looking statements that speak only as of the date
hereof.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, and otherwise in accordance with applicable law.
Additional Information and Where to Find It
In connection with the potential transaction, Goodyear expects
to file a registration statement on Form S-4 with the Securities
and Exchange Commission ("SEC") containing a preliminary prospectus
of Goodyear that also constitutes a preliminary proxy statement of
Cooper. After the registration statement is declared effective,
Cooper will mail a definitive proxy statement/prospectus to
stockholders of Cooper. This communication is not a substitute for
the proxy statement/prospectus or registration statement or for any
other document that Goodyear or Cooper may file with the SEC and
send to Cooper's stockholders in connection with the potential
transaction. INVESTORS AND SECURITY HOLDERS OF GOODYEAR AND COOPER
ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to obtain
free copies of the proxy statement/prospectus (when available) and
other documents filed with the SEC by Goodyear or Cooper through
the website maintained by the SEC at http://www.sec.gov. Copies of
the documents filed with the SEC by Goodyear will be available free
of charge on Goodyear's website at
corporate.goodyear.com/en-US/investors.html and copies of the
documents filed with the SEC by Cooper will be available free of
charge on Cooper's website at
http://investors.coopertire.com.
Participants in the Solicitation
Goodyear and Cooper and certain of their respective directors,
certain of their respective executive officers and other members of
management and employees may be considered participants in the
solicitation of proxies with respect to the potential transaction
under the rules of the SEC. Information about the directors and
executive officers of Goodyear is set forth in its Annual Report on
Form 10-K for the year ended December 31,
2020, which was filed with the SEC on February 9, 2021, and its proxy statement for its
2020 annual meeting of stockholders, which was filed with the SEC
on March 6, 2020. Information about
the directors and executive officers of Cooper is set forth in its
Annual Report on Form 10-K for the year ended December 31, 2020, which is expected to be filed
with the SEC on or around February 22,
2021, and its proxy statement for its 2020 annual meeting of
stockholders, which was filed with the SEC on March 26, 2020. These documents can be obtained
free of charge from the sources indicated above. Additional
information regarding the interests of such participants in the
solicitation of proxies in respect of the potential transaction
will be included in the registration statement and proxy
statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
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SOURCE The Goodyear Tire & Rubber Company