American firm, Goodyear Tire & Rubber Co., (Nasdaq: GT), the parent of PT Goodyear Indonesia Tbk (IDX: GDYR) has merged with a tire-maker, Cooper Tire & Rubber Co., (NYSE: CTB) - Photo by the Company

JAKARTA (TheInsiderStories) – American manufacturer, Goodyear Tire & Rubber Co., (Nasdaq: GT), the parent of PT Goodyear Indonesia Tbk (IDX: GDYR) has merged with a tire-maker, Cooper Tire & Rubber Co., (NYSE: CTB). In a statement released today, the management stated, Cooper’ shareholders will receive US$41.75 per share in cash and 0.907 Goodyear shares with valued around $54.36 a unit or in total for $2.8 billion.

After merged, Goodyear shareholders will own about 84 percent of the merged company. The company said, that the merger of the two entities is believed to save cost up to $165 million over the next two years. The upfront cost benefit will come from research and development also procurement functions.

“As we develop our business plans, we will begin to look at the opportunities, including revenue growth and how to utilize the combined production footprint we might be able to get,” said Richard J. Kramer, chairman and CEO of Goodyear.

He adds, the deal is expected to be completed in the second half of 2021. Lazard Ltd., and JPMorgan Chase & Co has appointed as Goodyear’ advisor. While, Goldman Sachs Group Inc. became an advisor to Cooper. Currently, the company produced tires at 46 plants in 21 countries.

In Indonesia, its affiliated plans to add more outlets and widen distribution channels around the archipelago after suffered by the pandemic during 2020. In the third quarter of 2020, the tyre producer net sales fell 27.40 percent to $74.93 million and booked a net loss of $4.31 million from a year ago.

The domestic sales also fell 29.18 percent to $42.90 million by the end of the third quarter similar with export sales down 24.86 percent to $32.03 million. The issuer decided to stay focused on selling tires in the domestic market and still trying to maintain its tire products for the middle segment cars and looking an overseas market.

The US company controlled 85 percent of the Indonesian company, PT Kalibesar Asri owned 7.07 percent, and public 7.93 percent. Currently, the capitalization market of Goodyear Indonesia is recorded of Rp574 billion ($40.71 million).

The tire industry just recover from the downturn during the pandemic. Last week, French tire producer, Michelin (EPA: ML), predicted the business would return to pre-pandemic levels in the second half of 2022.

US$1: Rp14,100

Written by Editorial Staff, Email: theinsiderstories@gmail.com