This transaction takes tire-kicking to another new level.
Yesterday Goodyear Tire & Rubber, the largest tire manufacturer in the United States, announced a $2.8 billion deal to acquire the number two player, Cooper Tire & Rubber.
Tired Out in 2020, Accelerating Ahead
The global tire industry was stuck in place for much of 2020 as the COVID-19 pandemic slashed demand for replacement tires.
But with the Covid-19 vaccine rollout in full force — and the backdrop of record-low interest rates — industry observers anticipate a rebound for auto products and services.
Street Smarts: Goodyear CEO Richard Kramer told investors the proposed deal would lift the combined company’s sales volumes of replacement tires to 64 million in the U.S.
- Cooper’s replacement tires will now have access to Goodyear’s network of 2,500 retail stores.
- The deal will also boost Goodyear’s strength in the lucrative light truck and SUV segments and expand its footprints in North America and China, nearly doubling it in the latter.
Goodyear hopes to unearth $165 million in cost synergies within two years from the metaphorical seat cushions.