The move not only provides "a strong and immediate" boost for Cooper shareholders, Hughes said, but it also creates a "stronger, more competitive force" within the industry.
"We feel like it recognizes the great progress we've been making as a company, transforming into a consumer-facing company with a strong manufacturing footprint, which was only made possible by the great work of Cooper team around the globe," Hughes said.
"It's a global industry with a lot of competitors, a lot of new technology coming to the market, and bringing the two teams, the two companies, the two strategies together, they will emerge as stronger entity.
"This combination will be effective early. The cultural similarities and value systems of the two teams will allow integration process to happen more efficiently, more effectively, and it's going to create a much easier path to a very successful shared future."
Kramer noted that combing Cooper's activities should yield $165 million in "run-rate" savings through synergies over a two-year period.
Those saving synergies will be realized in selling, general and administrative expenses; research and development; distribution and warehousing; and procurement.
At the same time, Goodyear said it expects to book expenses of $150 million to $175 million in order to achieve those synergies.
Potential synergies in leveraging the respective manufacturing assets are still to be determined. Kramer said no plant closings or personnel layoffs are expected, although the combined company will operate out of a single headquarters, in Akron.
"Our intention is, as we work through integration, to understand better how we can best utilize and optimize the capacity of the two combined footprints," Kramer said. "That will be a key focus for us going forward."
A key element of the manufacturing piece is Goodyear's acquisition of Cooper's 10 factories (nine tire plants and a tire components unit). Annual global production capacity for the combined operation will be 200 million units, including 64 million in North America.
Cooper operates two plants in China, significantly boosting opportunity there for OEM business in a revamped Goodyear.
"Between the U.S. and China, that's where the growth and the lion's share of the global tire industry sits," Kramer said. "Clearly, a real benefit for us going forward."
Another benefit for Goodyear is a broadened portfolio. While Kramer said the company will continue to market Goodyear as its premium brand, Cooper's array of brands will complement Goodyear's lower-tier offerings, which now include Kelly and Dunlop.
"Given the industry trends in the U.S. market, we believe there are significant advantages to offering a more comprehensive portfolio," Kramer told investors on the morning of the sale. "This robust suite of brands will allow us to have an unmatched product offering across the entire value spectrum ensuring we can meet the needs of all customers and consumers."
Kramer said Cooper's work in upgrading its lineup, particularly the Mastercraft brand, will enhance the Goodyear LT/SUV portfolio.
"There's room for both the Goodyear premium brand and there's absolutely room for some of the key brands that come with this combination," Kramer said.
Questions remain about the distribution network. Currently, TireHub L.L.C., a wholesale operation owned 50/50 by Goodyear and Bridgestone Americas Inc., serves as those tire makers' main distributor. Goodyear also operates 569 retail stores in the U.S., and has minority ownership stakes in three dealerships in Canada, comprising nearly 200 points of sale.
"Creating broader distribution for Cooper's replacement tires through Goodyear's branded retail stores and our high-growth, direct-to-consumer channels, such as our e-commerce platform and mobile installation business, will benefit volume and increase Cooper's brand awareness with consumers," Kramer told investors. "We also believe we can capture more value of Cooper's products by leveraging TireHub and our aligned third-party distribution network."
It also remains unclear how the commercial tire sector might emerge in the revamped operation. Both CEOs, though, expressed excitement for combining each company's efforts in sustainability mobility.
"We're developing intelligent tires that can be integrated into autonomous driving systems, and we're rethinking the materials we used to create more sustainable products along the way," Kramer said. "Bringing our companies together will further improve the scale needed to support this innovation."
In a letter sent to employees on the morning of the sale, Hughes said Cooper enters the agreement "from a position of strength," and he lauded their efforts in transforming Cooper "into a consumer-driven company that we were approached by Goodyear."
As the integration process begins and federal regulators review the deal—analysts say there's no reason to believe it won't be approved—each company will continue to operate as a separate entity.
It will, however, bring Cooper full circle. The company was founded in Akron in 1914 as the M & M Manufacturing Co. by John F. Schaefer and Claude E. Hart, who were related by marriage. It originally manufactured tire patches, tire cement and tire repair kits, before purchasing the Giant Tire & Rubber Co. of Akron, a tire rebuilding business, in 1920.
In 1922, Cooper moved to Findlay, merged with Cooper Corp. in 1930 and adopted the Cooper Tire & Rubber name in 1946.
"I believe this transaction is the right next step for Cooper at the right time," Hughes wrote to employees. "The idea of change can be difficult, and it is important that you take the time to learn about this transaction and process the information in your own way. There is no rush."
Goodyear, meanwhile, was founded in Akron in 1898 by Frank Seiberling, who named the company in honor of Charles Goodyear, the man credited with discovering vulcanization.
"We believe this transaction will create significant value for all our stakeholders, our shareholders, our customers, our employees, and of course, the communities in which we operate," Kramer said.