The Goodyear Tire & Rubber Company today announced that it has completed its acquisition of Cooper Tire & Rubber Company, finalizing the merger agreement made public on February 22.

The combination unites two tire companies with complementary product portfolios, services and capabilities to create a stronger U.S.-based leader in the global tire industry, Goodyear says.

“We are excited to officially bring Goodyear and Cooper together and unite our shared focus on customers, innovation and high-quality products and solutions. This combination strengthens Goodyear’s ability to serve more consumers globally and provides increased scale to support greater investments in new mobility and fleet solutions,” said Richard J. Kramer, Goodyear chairman, chief executive officer and president.

According to Goodyear, the merging of the two companies is expected to:

• Strengthen Goodyear’s position in the global tire industry: The acquisition is expected to further strengthen Goodyear’s leading position in the U.S., while significantly growing its position in other North American markets. In China, the combination nearly doubles Goodyear’s presence and increases the number of relationships with local automakers, while creating broader distribution for Cooper replacement tires through Goodyear’s network of 2,500 branded retail stores.
• Combine two complementary brand portfolios with an offering across the value spectrum: The combined company will have the opportunity to leverage the strength of Goodyear original equipment and premium replacement tires, along with the mid-tier power of the Cooper brand, which has particular strength in the light truck and SUV segments, Goodyear says.
• Synergies and tax benefits: Goodyear expects to achieve approximately $165 million in run-rate cost synergies within two years. The majority of the cost synergies will be related to overlapping corporate functions and realizing operating efficiencies, according to the Akron, Ohio-based tiremaker. In addition, the combination is expected to generate net present value of $450 million or more by utilizing Goodyear’s available U.S. tax attributes. These tax attributes are expected to reduce the company’s cash tax payments, positioning it to generate additional free cash flow. The expected cost synergies do not include manufacturing-related savings.
• Earnings and balance sheet: The acquisition is expected to be accretive to earnings per share within the first full year following closing, modestly improves Goodyear’s balance sheet position and enhances the company’s ability to de-lever, according to Goodyear.
• Create value from manufacturing and distribution: Opportunities for expansion of select Cooper facilities are expected to increase capital efficiency and flexibility, Goodyear says. Additional revenue growth opportunities are expected to result from the addition of the Cooper brand to Goodyear’s global distribution network.
• Increase scale to support investments in new mobility and fleet solutions: The combined company will offer tire products and a broad selection of services through Goodyear’s relationships with traditional and emerging OE manufacturers; autonomous driving system developers; new and established fleet operators; and other mobility platforms, the company says.

With complementary business models, organizational structures and distribution channels, Goodyear says it will integrate “the best of Goodyear and Cooper in order to benefit its shareholders, customers, consumers and employees.”

As a result of the closing, Cooper’s common stock will cease to be traded on the New York Stock Exchange.