Goodyear Tire & Rubber: M&A Synergies
商品編號：W32285
出版日期：2023/06/14
再版日期：
商品來源：
商品主題：Accounting; Finance
商品類型：Case (Gen Exp)
涵蓋議題：valuation;discounted cash flow DCF;mergers and acquisitions M&A;valuation multiples;EPS dilution;investment banking;synergy
難易度：4 - Undergraduate/MBA
內容長度：15 頁
地域：United States
產業：Manufacturing
事件年度：2020
In late 2020, The Goodyear Tire & Rubber Company (Goodyear)’s chief executive officer, Richard Kramer, told Cooper Tire & Rubber Company (Cooper)’s chief executive officer, Bradley Hughes, that Goodyear would submit an acquisition proposal by the end of the year. Goodyear had spent the last two years enduring global weakness in the automotive industry and the onset of the worldwide COVID-19 pandemic, which contributed to Goodyear’s stock falling 70 per cent below its high of $35 in 2018. Kramer attributed the stock’s decline to an “industry downcycle,” and one analyst speculated that a merger could provide much needed cost and revenue synergies. Goodyear had used mergers and acquisitions (M&As) to achieve scale and fuel its growth in the past, and Kramer’s team needed to decide if a merger with Cooper could help them weather the downturn and emerge stronger. Kramer and his team identified several cost synergies, totalling $165 million per year. They also expected efficiency and tax synergies with a present value of at least $700 million as well as revenue synergies. Goodyear was considering using a combination of debt, stock, and cash to finance the transaction. To avoid earnings per share dilution from issuing too many shares as merger consideration, they were working with financial advisor J.P. Morgan to secure up to $2.314 billion of new debt financing. Kramer told Hughes that his team would work over the year-end holidays to provide “a revised proposal or other update” in January 2021.
教學手冊：Goodyear Tire & Rubber: M&A Synergies - Teaching Note
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