AKRON, Ohio — The Goodyear Tire & Rubber Co. and Cooper Tire & Rubber Co. announced the companies have entered into an agreement for Goodyear to acquire Cooper in a transaction with a total value of approximately $2.5 billion.

The transaction will expand Goodyear’s product offering by combining two portfolios of complementary brands. It will also create a stronger U.S.-based manufacturer with increased presence in distribution and retail channels while combining both companies’ strengths in the highly profitable light truck and SUV product segments. The combined company will have approximately $17.5 billion in pro forma 2019 sales.

Founded in 1914, Cooper is the fifth-largest tire manufacturer in North America by revenue with approximately 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.

“This is an exciting and transformational day for our companies,” said Richard J. Kramer, Goodyear chairman, chief executive officer and president. “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. We are confident this combination will enable us to provide enhanced service for our customers and consumers while delivering value for shareholders.

“We have a great deal of respect for Cooper’s team and share a commitment to integrity, quality, agility and teamwork. We look forward to welcoming Cooper to the Goodyear family.”

Both brands are heavily involved in motorsports. Goodyear is the official tire of NASCAR and the NHRA while Cooper Tires has been active in off-road racing as well as the Road to Indy ladder as a tire supplier and sponsor of the Cooper Tires USF2000 Championship, Indy Pro 2000 presented by Cooper Tires and Indy Lights presented by Cooper Tires.

“Cooper has transformed into a dynamic, consumer-driven organization that has balanced traditional and emerging channels to increase demand for our products, while updating and effectively leveraging our global manufacturing footprint,” said Brad Hughes, Cooper president & chief executive officer. “I am extremely proud of what our team has accomplished over the past 107 years and am grateful to our talented employees for their contributions and commitment. This transaction marks the start of a new chapter for Cooper, which we are entering from a position of strength. We believe that it represents an attractive opportunity to maximize value for our shareholders, who will receive a meaningful premium as well as the opportunity to participate in the upside of the combined company. We look forward to the opportunity to combine Cooper’s considerable talents with Goodyear’s, and to be part of a bigger, stronger organization that will be competitively well-positioned to win in the global tire industry.”

Under the terms of the transaction, which has been approved by the Boards of Directors of both companies, Cooper shareholders will receive $41.75 per share in cash and a fixed exchange ratio of .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 on Feb. 19, the last trading day prior to the announcement, the implied cash and stock consideration to be received by Cooper shareholders is $54.36 per share, representing a premium of 24 percent to Cooper’s closing stock price on Feb. 19, and a premium of 36 percent to Cooper’s 30-day volume weighted average price as of the close on Feb. 19. Upon closing of the transaction, Goodyear shareholders will own approximately 84 percent of the combined company, and Cooper shareholders will own approximately 16 percent.