US-based Cooper Tire & Rubber Co today said shareholders approved its sale to Apollo Tyres Ltd, clearing the decks for the $2.5 billion transaction billed as one of the largest US acquisitions by an Indian firm.
“We are pleased stockholders endorsed this compelling transaction (Cooper’s sale to Apollo tyres), which will create a $6.6 billion leader in the tyre industry with a strong global footprint that includes a presence in the world’s largest tyre market of North America as well as in the fastest growing geographies of India and China,” Cooper Chairman, Chief Executive Officer and President Roy Armes said in a statement.
When finalised, the pending merger will result in a strategic business combination that creates the seventh-largest tire company in the world, it added.
Approximately 78 per cent of Cooper’s outstanding common shares were voted, with more than 48 million shares voted in favour of the merger, representing approximately 96 percent of Cooper’s voted shares, the company said.
On June 12 this year, Apollo Tyres had announced that it would acquire Cooper Tire & Rubber Company in an all—cash transaction valued approximately at Rs 14,500 crore ($2.5 billion).
The deal, however, wasn’t taken positively by market and Apollo Tyre shares had tanked 26 per cent the next day on BSE forcing the company management to clarify that the move would not load its Indian operations with excessive debt.
Apollo had said that out of a total value of $2.5 billion to fund the acquisition, the Indian arm had taken a loan of only $450 million.
The major portion of debt of $2.1 billion would be leveraged on cash flows of Cooper and Vredestein, the company’s Netherlands—based arm.
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 revenue of over $4 billion.