Goodyear Tire & Rubber said it would buy Cooper Tire & Rubber in a $2.8 billion deal to beef up its portfolio in the high-margin light truck and SUV segments and strengthen its presence in North America and China, reported Reuters.
Shares of Cooper, which has historically had stronger margins than Goodyear, jumped 20% in morning trade while Goodyear stock was up 3.4%.
The deal, announced on Monday, nearly doubles Goodyear’s presence in China and broadens distribution for Cooper replacement tires through Goodyear’s network of 2,500 retail stores in the country. US and China, the two largest tire markets in the world, account for about one-third of global industry volume.