June 12, 2013: Apollo Tyres has announced that it plans to acquire Cooper Tire & Rubber Company of the US, the world’s 11th largest tyre maker, in an all-cash transaction valued at approximately Rs 14,500 crore (US $2.5 billion).
The deal, which is bigger than the previous biggest in India’s automotive space – Tata Motors’ acquisition of Jaguar Land Rover for $2.3 billion in 2008 – will catapult Apollo from 16th to seventh spot among the world’s tyre manufacturers. The close of the transaction is expected to take place within the second half of 2013.
This buyout, approved by the boards of both companies, brings together two companies with complementary brands, geographic presence, and technological expertise. While Apollo has a portfolio of premium and mid-tier brands, its own and that of Vredestein of Germany, Cooper supplies premium and mid-tier tyres worldwide through brands such as Cooper, Mastercraft, Starfire, Chengshan, Roadmaster and Avon. Along with Cooper, Apollo will have a diversified product offering that will cater to the passenger car, light and heavy truck, farm, and off-the-road vehicle segments globally.
The acquisition is in line with Apollo’s ambitious plans to increase its global footprint. Six months ago, speaking to Autocar Professional in December 2012, Neeraj Kanwar, vice-chairman and MD, Apollo Tyres, had said: “Our vision is to become a significant company in the global tyre industry. To join the elite league of global top 10 tyremakers, we are looking at almost tripling our current turnover of $ 2.5 billion in four years.” With Cooper, which clocked revenues of $ 4.2 billion in 2012, Apollo has moved closer to its goal. The combined Apollo and Cooper revenues for 2012 are estimated at $ 6.6 billion.
Commenting on the Cooper buy, Onkar S Kanwar, chairman, Apollo said: “This transformational transaction provides an unprecedented opportunity to serve customers in both developed and fast-growing emerging markets around the world. The combined company will be uniquely positioned to address large, established markets, such as the US and the European Union and the fast-growing markets of India, China, Africa, and Latin America.”
Roy Armes, Cooper’s chairman, CEO and president, said, “We have watched Apollo’s successful transformation into a major global tyre group and have a great deal of respect for its leadership. Together, our two organisations have almost no geographic overlap and significant opportunities for growth. We look forward to working together to drive continued growth in a dynamic global tyre business where increased scale and expanded manufacturing footprint help to ensure long-term success.”
TOP 10 TYRE MAKERS
Bridgestone
Michelin
Goodyear
Continental
Sumitomo
Pirelli
Cooper + Apollo
Hankook
Yokohama
Cheng Shin