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Apollo Tyres to acquire US-based Cooper Tire & Rubber Company for $2.5 billion

13 Jun 2013 Evaluate

In a largest M&A deal in India's automotive history, Apollo Tyres will acquire US-based Cooper Tire & Rubber Company in an all-cash transaction valued at $2.5 billion. The Gurgaon-based tyre major would offer Cooper stockholders $35 per share in cash, a 40% premium, to buy back all the shares and delist the Ohio-headquartered company from the New York Stock Exchange (NYSE).

The company plans to finance the deal through cash flows from its Indian operations and by leveraging that of Cooper Tire and Apollo's European operations. The company plans to raise major chunk of the fund of around $1.9 billion through seven-year dollar bonds and another $200 million from asset based loans (ABR).

The deal will dramatically change Apollo's revenue mix. From 65% India-specific revenue, Apollo will derive 22% revenue from India, 43-44% from the US, 18% from China and the remaining from Europe and the rest of the world.

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