This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Cooper Tire Soars on $2.5 Billion Indian Buyout

NEW YORK ( TheDeal) -- Cooper Tire & Rubber (CTB - Get Report) surged Wednesday as India's Apollo Tyres Ltd. said it would acquire tire maker in a $2.5 billion deal that provides for access to the U.S. market and would create one of the largest companies in its industry.

Cooper Tire jumped 41% to $34.66.

Terms of the deal call for Gurgaon-based Apollo to pay $35 per share in cash for Cooper, a premium of 43% to the target's Tuesday close. Apollo, which last month said it would sell its operations in South Africa to Sumitomo Rubber Industries Ltd. for $60 million, said it would fund the deal with new borrowings.

The companies said the deal would create a manufacturer with $6.6 billion in annual sales and rank as the world's seventh-largest tire seller. Findlay, Ohio-based Cooper, which ranks as the world's 11th-largest tire company by revenue, was founded in 1914 and does business via brands including Cooper, Mastercraft, Starfire, Chengshan, Roadmaster and Avon. Apollo, in business since 1972, has substantial market share in India and Europe but has been seeking to expand in areas such as North America that have been growing faster.

"This transformational 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 chairman Onkar S. Kanwar said in a statement. "The combined company will be uniquely positioned to address large, established markets, such as the United States and the European Union, as well as the fast-growing markets of India, China, Africa and Latin America where there is significant potential for further growth."

The companies expect the deal to close before year's end. Apollo said it expects Cooper to continue to be run by members of current management and to honor the terms of collective bargaining agreements in place.

Cooper chairman and CEO Roy Armes in a statement said the deal is in the best interest of shareholders and "offers attractive benefits to our customers and employees," noting that the companies "have almost no geographic overlap and significant opportunities for growth."

Apollo expects to generate synergies of at least $80 million annually at the Ebitda level within three years via better scale, product optimization and manufacturing improvements.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CTB $34.36 -0.52%
AAPL $93.81 0.08%
FB $118.67 0.93%
GOOG $700.33 1.10%
TSLA $242.92 0.90%


Chart of I:DJI
DOW 17,897.22 +123.58 0.70%
S&P 500 2,080.56 +15.26 0.74%
NASDAQ 4,814.73 +39.3720 0.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs