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Goodyear formally acquired Cooper to achieve a combination of advantages

Echemi 2021-06-09

On June 7, Goodyear Tire & Rubber Company announced that it had officially completed the acquisition of Cooper Tire & Rubber Company. This acquisition will integrate the advantages of the two outstanding tire manufacturers in terms of product portfolio, service and production capacity, thereby consolidating Goodyear's leading position in the global tire industry. The combined company will provide a full range of product matrix, which is beneficial to customers and consumers, making it easier and more convenient to purchase Goodyear and Cooper brand tire products.

Richard Kramer, Chairman, CEO and President of Goodyear said: "We are very pleased to be able to merge Goodyear and Cooper. Both of us focus on customers, innovative development and high-quality products and Mobile travel solutions. With this acquisition, our achievements in these related aspects are also combined. This acquisition will help Goodyear expand its scale and provide better services to more consumers around the world, and it will help We invest in new mobility and fleet solutions.

The integration of Goodyear and Cooper is expected to bring the following benefits: Consolidate Goodyear's leading position in the global tire industry. The acquisition will further strengthen Goodyear's leading position in the US market, while significantly enhancing its position in other markets in North America. In China, the acquisition will double the scale of Goodyear's business, establish business relationships with more local Chinese automakers, and expand the distribution range of Cooper tires through Goodyear's 2,500 branded retail stores. The advantages of the two brands complement each other to create a full range of product matrix. The combined company will not only take advantage of the strong product line of Goodyear's original matching tires and high-end replacement tires, but also gain strong support from the Cooper brand in the mid-end product field (mainly light truck and SUV tires).

The merger will also bring significant short-term and long-term financial benefits: synergies and tax advantages. In the next two years, Goodyear is expected to achieve approximately $165 million in revenue cost synergy, mainly from the streamlining of corporate functions and the improvement of operational efficiency. In addition, the acquisition is expected to achieve a net present value of at least $450 million from Goodyear's available U.S. taxes. These taxes will reduce the company's cash taxes and generate more free cash flow.

Create more value in manufacturing and distribution. Some Cooper plants are expected to expand production capacity, thereby improving capital efficiency and flexibility. At the same time, the Cooper brand will also benefit from Goodyear's global distribution network and is expected to gain growth opportunities in terms of revenue. Relying on complementary business models, organizational structures and distribution channels, Goodyear will integrate the advantages of Goodyear and Cooper to optimize benefits for shareholders, customers, consumers and employees.

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