The merger of the two companies, which together had sales of $6.6 billion last year, will create the seventh-largest tire company in the world with a strong presence in high-growth end-markets in four continents and a full range of brands, said the joint announcement by Cooper, based in Findlay, Ohio, and Apollo, based in Gurgaon, near New Delhi.
Cooper stockholders will receive $35 a share in cash, which translates to a 40 percent premium to the company's 30-day average price, the announcement said.
Apollo, founded in 1972, has manufacturing units in India, the Netherlands and South Africa. The century-old Cooper, currently the world's 11th-largest tire company, has manufacturing, sales, distribution, technical and design facilities in 11 countries and its brands include Cooper, Mastercraft, Starfire, Chengshan, Roadmaster and Avon, the companies 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," Apollo Chairman Onkar Kanwar said. He said the merged companies will be uniquely positioned to address large, established markets including the United States and the European Union, as well as the fast-growing markets of India, China, Africa and Latin America.
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." He said the two companies have almost no geographic overlap.
The deal is expected to close in six months subject to regulatory and Cooper's stockholder approvals. Cooper stock is currently traded on the New York Stock Exchange but after the merger it will become a privately held company.
The announcement said Cooper's current management is expected to continue and operate out of facilities around the world. It said Cooper will continue to recognize the labor unions and honor the terms of current collective bargaining agreements.
The Times of India said the deal will be largest in India's automotive history. The major portion of the financing will be through seven-year dollar bonds, while other sources will include cash flows Apollo's Indian operations, the report said.
The Wall Street Journal said the Cooper agreement will be the largest U.S. acquisition by an Indian company, becoming the latest in a number of such acquisitions of U.S. auto-parts suppliers by Asian companies.