Goodyear to acquire Cooper Tire at ~$2.8B valuation

February 23, 2021

The Goodyear Tire & Rubber Company (NASDAQ:GT) to acquire Cooper Tire (NYSE:CTB) for $41.75/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 ~$2.8B, the implied cash and stock consideration to be received by Cooper shareholders is $54.36/share.

The acquisition will expand Goodyear's product offering by combining two portfolios of complementary brands and 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.

Upon closing of the transaction, Goodyear shareholders will own ~84% of the combined company, and Cooper shareholders will own ~16%.

The transaction is immediately accretive to earnings per share and expected to achieve ~$165M in run-rate cost synergies within two years after closing.

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.”

Over the current book year the company from Akron could achieve a revenue around 14.58 billion USD (consensus estimates). This is hugely more than 2020's revenue of 12.32 billion USD.

Historical revenues and results Goodyear Tire & Rubber plus estimates 2020

Goodyear

The analysts expect for 2021 a net profit of 178 million USD. The majority of the analysts expects for this year a profit per share of 87 cent. The price/earnings-ratio therefore equals 19.33.

Analysts expect a dividend of 6 cents per share. Thus the dividend yield equals 0.36 percent. The average dividend yield of the automobile producers equals a low 1.36 percent.

Goodyear Tire & Rubber 's market capitalization is based on the number of outstanding shares around 3.92 billion USD. The Goodyear Tire & Rubber stock was the past 12 months quite volatile. Since last February the stock is even 58 percent higher. This year the stock price moved between 4 and 18 dollar.

Price data Goodyear Tire & Rubber 2007-2021

Click here for dividend Goodyear Tire & Rubber. On Monday the stock closed at 16.82 USD.

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