S&P puts Goodyear on positive watch

S&P said it placed all its ratings for Goodyear Tire & Rubber Co. on CreditWatch with positive implications.

The placement follows Goodyear reporting it plans to acquire Cooper Tire & Rubber Co., the agency said.

“While we estimate that Goodyear's debt leverage will initially be about 5x pro forma for the transaction before incorporating the benefits from its expected synergies, we believe the acquisition will bolster the company's long-term competitiveness in the replacement tire industry,” S&P said in a press release.

The agency said it aims to resolve the CreditWatch upon the transaction’s close in the second half of 2021. S&P plans to conduct a detailed review of Goodyear's post-close business strategy, related integration, free operating cash flow (FOCF) prospects and ongoing financial policy.

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