Apollo Tyres acquired Cooper Tire & Rubber for $2.5 billion, making it the largest deal in India's automotive and tire industry. The acquisition was financed entirely through debt based on Cooper's profitability prospects. The combined company will be the seventh largest tire company worldwide with $6.6 billion in annual sales. Apollo plans to retain Cooper's facilities and staff of over 14,000 employees. The acquisition increases Apollo's annual production capacity from 26 million to 80 million tires and allows both companies to expand their product lines and access new markets.

1. APOLLO-COOPER ACQUISITION
Presented by:
Abhishek Agrawal
Adithya Shyam
Ashwin Prasanth
Hitesh
Ramchandani
Karan Paul
Vaibhav Madaan

2. Apollo Tyres – Cooper Tire Deal
• Apollo Tyres snapped up the Findlay, Ohio-based Cooper Tire &
Rubber for a staggering $2.5 billion.
• It’s the largest deal in India’s automotive and tyre industry.
• The $2.5-billion tag is nearly three times what Apollo is worth and
will be paid entirely by debt, raised on Cooper’s profitability
prospects. In mergers and acquisitions (M&A) parlance, such
shopping is called leveraged buyout (LBO).
• The deal involves taking debt at two levels — $450 million on the
books of Apollo’s Mauritius-based subsidiary and $2.1 billion
between Cooper ($1.9 billion, from the US bond market) and
Vredestein ($200 million, an asset-backed loan).

5. Key Takeaways
• Combined organization will be world’s seventh largest
tire company with sales of $6.6B.
• More options for customers; growth opportunities for
employees.
• Apollo to retain and grow existing Cooper facilities
maintained.
• Management continuity.

6. Future Aspects of Synergy
• The current deal may not reap benefits as quickly and analysts fear
the first two or three years may be exceptionally tough when the
synergies won’t have kicked in but interest payments would have.
• Cooper has over 14,000 employees across the world and Apollo has
no intention of retrenching staff at the American company. That
means the combined strength of Apollo-Cooper will be 30,000.
• Deal increases Apollo’s capacity from 26 million to 80 million a
year.
• Apollo plans to introduce its truck tyres in the US market using
Cooper’s dealership network and also sell Cooper’s passenger
vehicle tyres in the Indian replacement market.

7. THANK YOU