Goodyear Tire & Rubber Co. agreed to buy Cooper Tire & Rubber Co. , a deal that seeks to combine the two biggest tire manufacturers based in the U.S.
Goodyear said Monday it would pay about $2.8 billion in cash and stock for its smaller rival, including $41.75 a share in cash for Cooper’s shares, which rose about 30% to $56.89 in afternoon trading. Goodyear’s shares increased 20% to $16.72.
The acquisition would add scale for Goodyear, giving it annual revenue of roughly $17.5 billion, more than 50 factories and around 72,000 employees, according to an investor presentation. Cooper’s tire brands include its namesake line and Mastercraft.
Meanwhile, the companies said they are eyeing $165 million of cost cuts annually within two years after the deal is complete.
Goodyear was the third-largest tire company globally by tire sales for 2019, according to industry publication Tire Business’s latest ranking. It trailed France’s Michelin, and Japan’s Bridgestone Corp. , according to the ranking. Cooper was the 13th-biggest tire maker over that time frame, but the second largest in the U.S. after Goodyear. Both companies are based in Ohio.