press trust of india
NEW DELHI, 12 JUNE: In one of the biggest overseas acquisitions by an Indian firm, Apollo Tyres today said it will take over US-based Cooper Tire & Rubber Co in an all-cash deal valued at about Rs 14,500 crore ($2.5 billion).
Post the transaction, Apollo Tyres will become the seventh largest tyre maker in the world by revenue at $6.6 billion from its current 16th position at $2.5 billion and give it greater access to the USA, the second largest automobile market in the world after China.
“This 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 Tyres chairman Onkar S Kanwar said.
As part of the deal, Apollo Tyres will take over the operations of Cooper, including eight plants and 14,000 employees in different parts of the world. The American firm is the 11th largest tyre maker in the world with a revenue of over $4 billion.
In terms of tyre production, Apollo’s capacity will more than double from 1,500 tons per day to 3,500 tons per day, Apollo Tyres vice-chairman and managing director Neeraj Kanwar said in a conference call.
The acquisition ranks among the ten biggest overseas acquisitions by Indian firms, which includes Tata Steel’s takeover of Corus for $12.2 billion in 2007; Bharti Airtel’s acquisition of Zain Africa for $10.7 billion in 2010, Aditya Birla group firm Hindalco’s acquisition of Novellis for $6 billion in 2007 and ONGC’s acquisition of Russia-based Imperial Energy for $2.8 billion in 2008.
This is Apollo’s third major overseas acquisition after taking over Dunlop South Africa for Rs 290 crore in 2006, which it has sold to Japanese Sumitomo Rubber Industries for $60 million (about Rs 340 crore) last month.
In 2009, Apollo acquired Netherlands-based winter-tyre maker Vredestein Banden BV for an undisclosed sum.