Apollo Tyres Ltd. is acquiring Cooper Tire & Rubber Co. for an all-cash amount of $2.5 billion. The purchase price is around 40-percent higher than the 30-day average price of Cooper's stock. Apollo’s acquisition of Copper effectively combines the 16th and 11th largest tire makers in the world, creating an entity that boasts of around $6.6 billion in annual sales.
The resulting company would be ranked seventh in the world, with output in a dozen sites in eight countries -- China, England, India, Mexico, the Netherlands, Serbia, South Africa and the United States. In a joint statement, Apollo and Cooper described the deal as a "strategic combination" of two companies with "highly complementary brands, geographic presence, and technological expertise." Cooper chief executive Roy Armes said in the statement that the deal is a "compelling transaction” in the best interest of their shareholders, offering "attractive benefits” to its customers and employees.
Armes remarked they have watched Apollo's transformation into a major global tire group, adding that they have “a great deal of respect for the company and its leadership.” He said that the companies have almost no geographic overlap and significant opportunities for growth. He added that Apollo and Cooper share a commitment to innovation, quality and customer service, as well as commitment to safety, environmental sustainability, “the development of our people and giving back to our communities."
Apollo chairman Onkar S. Kanwar remarked that the acquisition provides an “unprecedented” opportunity to serve customers in both developed and fast-growing emerging markets around the world. He noted that Cooper is “one of the most respected names” in the tire industry, with a wide-ranging distribution network and manufacturing infrastructure, as well as presence in North America and China. [source: USAToday]