Cooper Tire & Pirelli Tyres Form Strategic Alliance.

FINDLAY, Ohio/MILAN, Italy--(BUSINESS WIRE)--Feb. 11, 1999-- Cooper Tire & Rubber Company (NYSE:CTB) and Pirelli Tyres today announced the formation of a strategic alliance.

Set to begin immediately, this new venture will effectively combine the best resources from the world's sixth and eighth largest tire companies to improve their competitiveness through a multibrand strategy in the North and South American replacement tire markets. Capitalizing on Cooper's dealer relationships and manufacturing efficiency along with Pirelli's technological capability and expertise in the performance tire arena, the new venture will enhance the global position of both companies. Cooper will manage the distribution and sales of all Pirelli passenger and light truck tires in the U.S.A., Canada and Mexico replacement markets. Pirelli will strengthen its original equipment business thanks to the addition of new platforms on vehicles destined to the North American market, and in the future expects to begin providing tires directly to original equipment manufacturers in the U.S.A. In addition, Pirelli will continue to develop innovative products for the North American market and strengthen its brand awareness by increasing advertising and motorsport programs. Future plans include an agreement for Pirelli to distribute and market Cooper brand tires in South America.

In announcing the agreement, Patrick W. Rooney, Cooper's chairman and CEO was emphatic about the strategic fit, "While the trend in business today is to focus on assembling critical mass, we believe this arrangement will allow us to maintain complete flexibility in meeting the demands of our customers, will provide maximum returns for shareholders and yet, combine resources for successful global market penetration. This is a well-structured plan to help both companies achieve more success in the 21st century. As our industry continues to consolidate, strategic alliances are the ultimate way to maintain independence and continue to be a competitive factor in the market."

Giovanni Ferrario, CEO Pirelli Tyres stated, "We are pleased to join forces with Cooper, one of the leading independent tyre companies in the world, in a plan to improve market penetration for both companies in North and South America. Our strengths combined will make a formidable force in the tyre industry in the above areas. This move confirms our mission to create value to our shareholders through a strategy based on geographic alliances and on technological partnerships which truly strengthen the competitive capacity of our corporation."

Cooper will act as an agent of Pirelli Tyre North America and will aggressively market its complete tire line including ultra high performance tires. Cooper anticipates a sales increase for Cooper-produced tires as new relationships are developed with Pirelli customers. Thanks to the extensive retail network provided by the joint venture, Pirelli plans to nearly double its Pirelli branded tire sales and production in the NAFTA market over the next three years. The new venture will also benefit from global purchasing synergies by helping to optimize raw material costs for both companies.

The joint venture, based on contractual arrangements only and with no joint share holding, will create synergy using the talents of both companies. Cooper will bring its extensive distribution network system, including its warehouses and logistic capabilities, its leading relationships with independent tire dealers, wholesalers and retailers, a highly respected sales force, and its expertise in manufacturing efficiency to Pirelli's Hanford, California facility.

Pirelli will contribute its leading-edge performance tire technology which will be supported by new investments aimed at improving capacity output and cost competitiveness at its Hanford manufacturing facility. In addition, Pirelli will provide leadership in the high performance and ultra high performance segment of the market which specifically fits the need for domestic and imported luxury, sports cars and SUVs. Pirelli's unique brand awareness and upscale image will also be positive factors in the new venture.

In South America, Pirelli's historical presence and outstanding leadership will offer Cooper the opportunity to penetrate one of the fastest-growing passenger tire markets worldwide, through its extensive distribution system and overall knowledge of the South American market.

Cooper Tire & Rubber Company, founded in 1914, is the eighth largest tire manufacturer worldwide and fourth largest in the United States with sales of almost $1.9 billion. With more than 10,000 employees, Cooper specializes in the manufacturing and marketing of rubber products for consumers. Products include automobile, truck and motorcycle tires; inner tubes; vibration control systems; automotive sealing; hose and hose assemblies. Cooper markets its products in more than 100 countries to automotive manufacturing companies, independent tire dealers, wholesale distributors, mass merchandisers and large retail chains. Facilities include 12 manufacturing locations and 14 distribution centers worldwide. For more information on Cooper Tire, visit the company's web site at www.coopertire.com.

The Pirelli Tyre Sector is one of the world's top six tyre manufacturers, with 1997 sales of roughly US $3.2 billion, 23 factories with over 21,000 employees in 9 countries, and has a marketing network covering over 150 countries around the world. The Sector's product range is one of the most complete in the industry, comprising tyres for passenger cars, light and medium trucks, off-road vehicles and motorcycles. The high-tech image enjoyed by the Group internationally stems from extensive research activities carried out in its centres in Italy, Germany, Brazil and the United States. The market and the automotive industry have recognized this leadership, awarding Pirelli the distinction of having all the world's major car manufacturers today fit Pirelli tyres as original equipment. For more information on Pirelli, visit the company's web site at www.pirelli.com.