INDIAN firm Apollo Tyres will acquire a 100% stake in US-based tyre maker Cooper Tire & Rubber Company for US$2.5 billion (R14,500 crore). The former will fund the acquisition fully by raising $2.5 billion of new debt.
The deal will make Apollo the world’s seventh-largest tyre maker by revenue and purportedly the largest transaction for acquisition in India’s automotive sector.
The all-cash transaction will enable Cooper’s shareholders to receive US$35 per share, a 40% premium to the 30-day volume-weighted average price. Cooper Tires is listed on the NYSE. The deal is valued at 4.4 times the EBITDA of Cooper, reports say.
After the buyout, Apollo’s revenue will come not only from India (wherein, at pre-acquisition period accounts for 60% pf the company’s earnings), which will then account for 22% of its revenues, but also from the US (44%), China (18%), and the rest of the world, the company said