Apollo Tyres to buy Cooper Tyre & Rubber for Rs 14,500 crore
Apollo Tyres, the country’s largest tyre manufacturers have announced that they would be acquiring US based Cooper Tire & Rubber Company in all-cash transaction which has been valued at roughly Rs 14,500 crore ($2.5 billion).
Once the acquisition process is completed, Apollo Tyres will be the seventh largest auto company across the globe and the biggest in the Indian auto sector. Also as part of the takeover deal, Apollo Tyres buyout will include operations of eight plants of the US based firm along with its 14000 employees.
This will also enable Apollo Tyres to offer services to customers in a range of countries across the world and extend their reach to emerging and fast growing markets as well. Apollo Tyres will also be augmenting production capacities which are expected to double from the current 1500 tonnes per day to over 3500 tonnes per day. A consortium of four banks namely Morgan Stanley, Deutsche Bank, Goldman Sachs and Standard Chartered will be assisting Apollo Tyres in raising the required capital for the acquisition.
Onkar S. Kanwar, Chairman of Apollo said, “This transformational transaction provides an unprecedented opportunity to serve customers across a host of geographies in both developed and fast-growing emerging markets around the world. Cooper is one of the most respected names in the tire industry, with an extensive distribution network and manufacturing infrastructure, and a particularly robust presence in North America and China. The combined company will be uniquely positioned to address large, established markets, such as the United States and the European Union, as well as the fast-growing markets of India, China, Africa, and Latin America where there is significant potential for further growth. Our combined portfolio of brands and products will be amongst the most comprehensive in the industry.”
Roy Armes, Cooper’s Chairman, Chief Executive Officer and President said, “This is a compelling transaction that is in the best interest of Cooper’s stockholders and offers attractive benefits to our customers and employees. We have watched Apollo’s successful transformation into a major global tire group, and have a great deal of respect for the company and its leadership. Together, our two organizations have almost no geographic overlap and significant opportunities for growth. We share a commitment to innovation, quality, and customer service, as well as to the core values of safety, environmental sustainability, the development of our people and giving back to our communities. We look forward to working together to drive continued growth in a dynamic global tire business where increased scale and expanded manufacturing footprint help to ensure long-term success.”
Neeraj Kanwar, Vice Chairman and Managing Director of Apollo said, “The combined company’s diversified product offering will serve the passenger car, light and heavy truck, farm, and off-the-road vehicle segments. Our extended global reach will create opportunities to provide our customers and distributors around the world with increased access to the quality tires they have come to expect from each of our respective brands. Together, we will have a significant presence in each of the three largest automotive markets in the world, namely the United States, Europe and China.”
He added, “Importantly, both Apollo and Cooper have built strong reputations on the strength of their people, and this transaction will maintain the networks and workforces in each organization’s respective regions, while creating new opportunities in others. We are excited by the possibilities created by our partnership and look forward to welcoming Cooper’s employees to the Apollo family.”