The open letter that Elliott Investment Management L.P. sent to The Goodyear Tire & Rubber Company on 11 May 2023 was met with a promise to review the shareholder’s recommendations, which included the initiation of an operational review and the appointment of “five new highly qualified independent directors.” While Goodyear hasn’t met this wish list in its entirety, today the company announced three additions to its Board of Directors in connection with a cooperation agreement with Elliott.
Elliott Investment Management L.P., which holds around 10 per cent of The Goodyear Rubber & Tire Company shares, has published an open letter sent to Goodyear’s board of directors expounding on its “deep conviction in the opportunity for Goodyear to improve after more than a decade of underperformance”. Not only are Elliotts calling for five changes to the board, but they have set up a website (acceleratinggt.com) detailing plans to overhaul the business. Shares jumped 17% at the time of publication in response to the news.
Following the news that the UK Competitions and Market Authority (CMA) has opened an investigation into Yokohama’s acquisition of Trelleborg Wheel Systems (TWS), Trelleborg representatives have clarified that – in their view – “…there are no reasons why this deal should not be approved.”
On 14 June 2022 Hou Yugang, chairman of Zaozhuang Mining Group, went to Zhongxing Huitong Tire for research purposes. During his public speech, Hou Yugang affirmed that Zaozhuang Mining Group’s takeover of OTR tyre specialist Huitong had transitioned smoothly following the transfer of equity.
According to Federal Corporation’s 2021 annual report, which was published in mid-May 2022, on 15 October 2021, “major shareholder Nankang Rubber Tire Corp. Ltd. Nankang Rubber Tire Corp., Ltd…called an extraordinary shareholders’ meeting to obtain the management right[s].” Federal and Nankang representatives have been contacted by Tyres & Accessories for comment.
Following the news that HELLA and Faurecia are joining forces, the two automotive suppliers have announced that they will be operating jointly in the aftermarket. This means that Faurecia products will soon also be available through HELLA’s aftermarket division. By bundling activities, not only do customers benefit from a comprehensive range of services, but above all from a significantly expanded product spectrum.
Cooper Tire has “officially joined the Goodyear team”. That’s how Cooper Tire general manager EMEA, Jaap Van Wessum characterised the takeover of the company by fellow US tyremaker Goodyear, which was completed on 7 June 2021. Van Wessum also offered further details of what Cooper’s integration into Goodyear means for Cooper suppliers and partners.
The Goodyear Tire & Rubber Company has confirmed that it has completed its acquisition of Cooper Tire & Rubber Company, finalizing the merger agreement announced on 22 February 2021. The announcement brought with it one or two more hints of how the synergisation of the two businesses might work.
With the confirmation of its 197th consecutive quarterly dividend (announced on 6 May 2021), Cooper Tire & Rubber reiterated its position as one of the most consistent dividend-payers out there. However, this time the normally prosaic dividend payment announcement statement was spiced up by a single condition.
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.