The $2.5 billion Apollo-Cooper marriage was called off before they could say ‘I do’. Both parties are aggrieved, and everyone, it seems, is to blame. Together, they would have become the 7th largest tyre company in the world. But, as this reconstruction of events indicates, they let the roadblocks puncture that ambition
Neeraj Kanwar was having a moment. On a holiday. In London. On December 30, 2013.
The 40-year-old managing director of the $2.4 billion Apollo Tyres, India’s largest tyre company, Kanwar had had a tumultuous year. Travelling for over 130 days, he had been holed up mostly in the US where Apollo Tyres was painstakingly trying to acquire Cooper Tire & Co. It was a year when he had spent most of his time explaining, negotiating and strategising escape routes out of one crisis to another; when he was surrounded by people he didn’t quite trust, one of whom even took him to court and questioned his integrity in business. In a two-decade-long professional career, his integrity was the one thing he took immense pride in. When alone, it was also a year that often forced him to contemplate his next move, in business, in the courts.
But back in the comfort of his London home, surrounded by his two children and wife, during lunch, Kanwar was having a moment—of introspection, reflection. The year was finally coming to an end and he was glad. It was then that his mobile phone rang. The call was from a colleague in the US. “Hi, Neeraj. Cooper has called off the merger. Just announced,” he was told.
Kanwar didn’t react immediately. This was yet another ‘surprise’ in a year full of surprises. He got off the call quickly. Lunch had not yet been served. He got up to find a quiet corner. And called his dad.
Coming of age
The Apollo-Cooper merger was announced on June 12, 2013. A day after the announcement, the price of the Apollo Tyres stock, which is traded on the National Stock Exchange of India and the Bombay Stock Exchange, dropped from the previous day’s close of Rs 92 to Rs 68.60 per share. A day later, it reached its 52-week low on concerns that Apollo was taking on too much debt to pay Cooper—nearly $2.5 billion.
Source: Forbes India
Published: 31 Jan 2014