Goodyear Tire & Rubber Co. GT, +1.61% said Monday it is acquiring Cooper Tire & Rubber Co. CTB, +2.46% in a deal with an enterprise value of about $2.5 billion. Under the terms of the deal, Cooper shareholders will receive $41.75 per share in cash and 0.907 shares of Goodyear for a total equity value of about $2.8 billion. That is equal to a price of $54.36 per share, or a premium of 24% over Cooper’s 30-day volume weighted average price as of the close on Friday. Goodyear shareholders will own about 84% of the combined company, while Cooper shareholders own the remaining 16%. The deal is expected to close in the second half and to immediately boost Goodyear’s per-share earnings. Cooper was founded in 1914, and is the fifth biggest tire maker in North America, measured by revenue, with about 10,000 employees in 15 countries. “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,” Goodyear Chief Executive Richard J. Kramer said in a statement. The deal is expected to generate run-rate cost synergies of about $165 million in two years after closing. Cooper shares jumped 12.5% premarket, while Goodyear shares were not yet active.
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