5 notable mergers and acquisitions of 2021

COVID-19 defined 2020 and brought with it clouds of uncertainty that changed the business landscape. That changed in 2021, despite ongoing COVID-19 challenges, because companies had clear views of the road ahead. The pandemic shone a bright light on companies' strengths and vulnerabilities, which allowed them to take strategic steps to better position themselves for growth and success.

It also helped that the market was ripe for buying and selling. Favorable market trends and an influx of capital were drivers for the big deals that transpired this year. It's all part of an economic cycle that creates ideal moments for M&A, according to Bill Wood, founder of Greenfield, Mass.-based Mountaintop Economics & Research Inc.

"Money and access to money at the present time is cheap, and access is relatively easy," Wood told Rubber News. "If you have leverage, you can go out and borrow money at relatively low rates, and by that, I mean the interest rates, as we know, are low.

"And what are you going to do with the money? … You can invest in new equipment or you can invest in buying a whole factory, buying the whole shop. Because if you have cash, and a lot of people do have a lot of cash—there is no shortage of capital in the country—you can't put it in the bank and make anything."

Here's a look at some of the most notable deals made in 2021.

Goodyear and Cooper Tire & Rubber Co. announced a merger Feb. 22 that sent shockwaves through the tire industry.

The $2.5 billion cash-and-stock purchase brought together Goodyear, the world's third-largest tire maker with annal global sales of $13.7 billion, with the 13th-largest tire maker in Cooper Tire, which has annual global sales of around $2.8 billion.

The acquisition was finalized June 7.

In addition to helping Goodyear solidify its place as the No. 3 tire maker worldwide, the deal brought two of the few remaining U.S.-based tire makers together under one umbrella and helped to set the course for what Richard Kramer, Goodyear chairman, CEO and president, emphasized would be a technology-driven, new-mobility company.

It took 19 months for Danfoss Co. to officially acquire Eaton Corp.'s hydraulics unit, but the finalization of the $3.3 billion deal on Aug. 2 marked the marriage of the two largest power management companies in the world.

With the move, 10,000 former Eaton employees were added to the Danfoss team. Moreover, with the Eaton hydraulics addition, the Nordborg, Denmark-based Danfoss increased its annual revenue by about $1.8 billion and roughly doubled the size of its Danfoss Power Solutions segment.

The transaction, first announced early in 2020, was contingent upon U.S. Department of Justice and European regulatory agency approval and the subsequent divestment of Danfoss and Eaton facilities in the orbital motor and hydraulics steering unit spaces.

Bridgestone Americas Inc. is focused on new technology and tire development. And the sale of its Firestone Building Products unit is proof of where the company sees its future.

In a $3.4 billion deal that took about three months to close, Bridgestone Corp. sold its flat roofing systems unit to LafargeHolcim Ltd., a company traditionally grounded in the cement, concrete and aggregates space.

With the purchase of Firestone Building Products, LafargeHolcim added 1,900 employees and a business that had sales of about $1.8 billion in 2020. Firestone Building Products also held about a 4-percent share of the world's flat-roof market at the time of the sale.

In a deal that closed Dec. 1, Synthos S.A. added manufacturing sites, intellectual property, and research and development facilities with the acquisition of Trinseo S.A.'s synthetic rubber business.

Synthos paid $402.4 million in cash for the Trinseo business, in exchange for $47 million of net working capital to be collected by Trinseo.

The move brings Synthos' combined annual SR production capacity for ESBR, PBR and SSBR to more than 800,000 metric tons, while enhancing and streamlining its R&D capabilities. About 440 former Trinseo employees joined the Synthos team.

DuPont is making a series of moves that it believes will better strengthen its market position by focusing on high-growth, high-margin businesses.

To achieve this aim, the company plans to divest a substantial portion of its Mobility and Materials segment and acquire Rogers Corp. in a deal worth $5.2 billion. The transaction is expected to close in the second quarter of 2022.

Rogers has a work force of more than 3,500 employees and operates a global network of 14 manufacturing sites in North America, Europe and Asia. Its 2021 expected revenues are approximately $950 million.