With the addition of the Cooper Tire business, Goodyear will return to the global number three ranking in passenger car and light truck (PCLT) tyre volumes in 2021. After previously holding the clear number three ranking behind the world’s largest tyre manufacturers, Bridgestone and Michelin, Goodyear was joint third with Continental in both 2017 and 2018. In 2019, Goodyear fell behind Continental to fourth position in 2019 and 2020. Working on a pro forma basis combining original equipment and replacement market tyres, Astutus Research data reveals some interesting facts about the nascent conjoined organisation, with reference to their largest tyre business segment in terms of volume.
Goodyear’s $2.5 billion-dollar acquisition of Cooper is the biggest tyre industry news story of 2021 so far (click here for detailed analysis of the deal itself). But takeovers – especially those this big – are seldom easy. A large portion of the motivation behind the acquisition is to bolster Goodyear’s position in the high-value 4×4 and SUV tyre segments. So, with this in mind, what kind of terrain is the deal likely to encounter as the two companies make their way towards integration?
The day after Goodyear announced that it is buying Cooper Tire for north of $2.5 billion, Fitch Ratings affirmed its Long-Term Issuer Default Ratings of The Goodyear Tire & Rubber Company (GT) and its Goodyear Europe B.V. (GEBV). Fitch also affirmed its ratings on a number of specific funding lines. Both moves can be interpreted as partially affirming the Goodyear Cooper acquisition’s strategic logic – something that was described as compelling by the senior executives of both companies.
Goodyear’s takeover of Cooper Tire has been positively received by the stock markets, with Cooper’s share price jumping 31.8 per cent from 43.81 before the news was announced to $57.75 two days later. Goodyear‘s share price also swelled, up 28.9 per cent from $13.52 beforehand to $17.43 48 hours after the takeover news was released.
Explaining the rationale behind Goodyear’s multi-billion dollar acquisition of Cooper Tire, executives said the combination offers “compelling strategic and financial benefits”. Specifically, they suggested the transaction “further strengthens Goodyear’s leading position in the US, while significantly growing its position in other North American markets.” With just two home-grown domestic tyremakers in the US (Goodyear and Cooper), that much is clear. However, the benefits of the announced merger are not limited to North America. In China, the combination will almost double Goodyear’s presence. According to Goodyear, it will also increase the Akron, Ohio-based tyremaker’s OE tyre supply position, while creating broader distribution for Cooper replacement tyres through Goodyear’s network of 2,500 branded retail stores.
The Goodyear Tire & Rubber Company and Cooper Tire & Rubber Company have made “a definitive transaction agreement” that will see Goodyear buy Cooper for roughly $2.5 billion. The combined company will have approximately $17.5 billion in pro forma 2019 sales. Upon closing of the transaction, Goodyear shareholders will own approximately 84 per cent of the combined company, and Cooper shareholders will own approximately 16 per cent.
Univergomma recently completed the acquisition of 100 per cent of Overgom’s shares. Overgom, founded in 1977 by Arenzo Girardi as a regional wholesaler, has grown over the years to become a leading tyre distributor in Italy and abroad.
No I am not talking about the unqualifiable rumours that Doublestar made an offer of up to 250 million euros for Zenises. Rather, that in the first week of September we learnt that Doublestar’s proposed acquisition of Kumho was collapsing before the firm’s eyes after the Qingdao-Chinese tyre manufacturer asked for a double-digit discount. And it is also worth considering what all this means for the wider tyre manufacturing sector.
Apollo Tyres has denied reports published in India’s Economic Times suggesting that it is about to enter the race to acquire Kumho Tire. An Apollo spokesperson told Tyres & Accessories: “Apollo Tyres strongly denies the story headlined ‘Apollo Back in Kumho Race as Geopolitics Sours China Deal’ that appeared in the print edition of The Economic Times on 2 October, 2017.
Doublestar’s proposed acquisition of Kumho is reportedly close to collapse after the Qingdao-Chinese tyre manufacturer asked for a double-digit discount. According to reports in the Nikkei, Kumho’s major shareholders are planning to write to Doublestar asking the firm to agree to the end of bid talks between the two parties.
Speaking off the record, Chinese executives within Qingdao Doublestar have confirmed the company’s intentions to purchase well-known South Korean tyre manufacturer Kumho Tyre and that it is “now only Doublestar left to buy Kumho”. However, at roughly the same time, Korean newspapers have been reporting that Doublestar probably won’t have the right to use the Kumho brand name post-acquisition. With all this in mind, Tyres & Accessories summaries the story so far.
According to the company’s executive chairman Ian Edmondson, the goal is to find a suitable partner to help the company continue to move forward at its current rate of positive growth: “Our shareholders are now seeking to find a new investor who is in a position to help the business maintain the outstanding growth record that it has delivered in recent years.”
Knorr-Bremse AG has made a takeover offer for all shares in Haldex. Knorr-Bremse is offering 110.00 Swedish krone per Haldex share, 10.0 per cent higher than ZF Friedrichshafen AG’s offer of 100.00 krone per Haldex share.