Goodyear to buy Cooper for US$2.8 billion to strengthen SUV tire lines
|driving.ca 22 Feb 2021 at 15:21|
The logo of US tire manufacturer Goodyear is seen at a garage in Caracas, on December 11, 2018. Federico Parra / AP via Getty
Goodyear Tire & Rubber said it would buy Cooper Tire & Rubber in a US$2.8-billion deal to beef up its portfolio in the high-margin light truck and SUV segments and strengthen its presence in North America and China.
The deal, announced on February 22, nearly doubles Goodyear’s presence in China and broadens distribution for Cooper replacement tires through Goodyear’s network of 2,500 retail stores in the country. U.S. and China, the two largest tire markets in the world, account for about one-third of global industry volume.
The combined company will also benefit from Goodyear’s original equipment and Cooper’s strength in the rapidly growing light truck and SUV product segments.
The global tire industry was hard hit in 2020 as the COVID-19 pandemic led to a sharp decline in demand for replacement tires and original equipment, forcing automakers to halt production.
However, industry experts expect a rebound in auto demand this year, fueled by the rollout of COVID-19 vaccines, record low interest rates and healthy consumer savings as people held off spending money on large purchases during the pandemic.