By Kuldip K. Ambastha
In the past trading week, The Goodyear Tire & Rubber Company (GT) announced plans to acquire Cooper Tire & Rubber Company (CTB). The plans were made public on Monday, February 22, 2021, and on that same trading day Goodyear stock had a +21.0% gain while Cooper stock had a +29.4% gain. The strong gains on that trading day for the shares of both companies imply that Wall Street is bullish about this deal. Goodyear and Cooper are both American tire companies headquartered in Ohio.
With this acquisition, Goodyear will be able to enhance its dominant presence in the USA and approximately double its presence in China. Cost savings are estimated to be about $165 million in the first two years after the acquisition. Beyond cost savings, other details of how a combined entity would operate were not yet available. This deal is still subject to regulatory review and has to be approved by Cooper shareholders. If it closes, the deal will close in 2021 within the second half of the calendar year.
Keywords – The Goodyear Tire & Rubber Company, Goodyear, GT, Cooper Tire & Rubber Company, Cooper, CTB, USA, American, tire, Ohio, China, Wall Street, merger, acquisition, M&A, cost savings.
Disclosure – The principals and clients of Ambastha Financial LLC have no positions in GT or CTB.
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