Cooper Tire to be taken over by Indian tire firm Apollo Tyres

6/12/2013
BLADE STAFF
  • COOPER-TIRE-8

    Bloomberg News

    • FINDLAY -- Shares of Cooper Tire & Rubber Co. rose 41 percent today after the company announced that it would be bought by an Indian tire company.

    Apollo Tyres Ltd., of Gurgaon, India, and Cooper Tire jointly announced a definitive merger agreement. Cooper Tire will become a part of Apollo in an all-cash transaction.

    The deal is worth $2.22 billion.

    If approved by regulators and stockholders, Apollo will pay $35 in cash for each outstanding share of Cooper.

    Cooper shares closed at $34.66, up $10.10 per share.

    The agreement has been approved by the boards of directors of both companies.

    The firms termed it a "strategic combination" bringing companies with "highly complementary brands, geographic presence, and technological expertise."

    Apollo, founded in 1972, now makes premium and mid-tier brands, including its flagship Apollo brand and Vredestein. Cooper Tire, founded in 1914, supplies premium and mid-tier tires worldwide, including brands such as Cooper, Mastercraft, Starfire, Chengshan, Roadmaster, and Avon.

    The combined company will be the seventh-largest tire company in the world. The two firms had a combined $6.6 billion in sales in 2012.

    Onkar S. Kanwar, chairman of Apollo, said in a statement, “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."

    Roy Armes, Cooper Tire’s chairman and chief executive officer, said in a statement, “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."

    The close of the transaction is expected to take place within the second half of 2013, the companies said.

    After the deal, Cooper Tire would become a privately held company and its common stock would no longer be traded on the New York Stock Exchange.

    The announcement said "it is expected that Cooper will continue to be led by members of its current management team and will continue to operate out of its facilities located around the world. Cooper will continue to recognize the labor unions and honor the terms of collective bargaining agreements presently in effect while generally maintaining compensation and benefit levels for non-union employees."

    Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc. served as financial advisors and investment firm Greater Pacific Capital acted as strategic and financial advisor to Apollo.