Under terms of the deal, Cooper shareholders will receive $41.75 a 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 approximately $2.8 billion.
Based on Goodyear's closing stock price Friday, the implied cash-and-stock consideration to be received by Cooper shareholders is $54.36 a share, representing a 24% premium to Cooper's closing stock price, the companies said in a statement.
At last check, shares of Cooper Tire were up 26.32% at $55.39. Goodyear shares were up 11.16% at $15.44.
On closing, Goodyear shareholders will own bout 84% of the combined company, while Cooper shareholders will own approximately 16%. Goodyear said it plans to fund the cash portion of the transaction through an existing credit line facility. The deal is expected to close in the second half of 2021.
"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,” Goodyear CEO Richard Kramer said in a statement.
Founded in 1914, Cooper is the fifth-largest tire manufacturer in North America by revenue, with bout 10,000 employees working in 15 countries worldwide. Cooper products are manufactured in 10 facilities around the globe, including wholly-owned and joint venture plants.
The company's portfolio of brands includes Cooper, Mastercraft, Roadmaster and Mickey Thompson.