Cooper Tire: Apollo merger still on track; U.S. plants OK
A little update on the latest news regarding India-based Apollo Tyre‘s $2.5 billion merger with Cooper Tire & Rubber Co.
Recently, an arbitrator ruled Cooper can’t sell its unionized plants in Findlay, Ohio or Texarkana, Ark., unless Apollo recognizes the United Steelworkers union and deals with them first.
But Cooper Tire’s vice president of communications and public affairs, Anne Roman, said “Cooper Tire and Apollo are continuing discussions with the unions with an aim of reaching an amicable resolution quickly to minimize any impact on the original closing schedule (by the end of 2013).”
Meanwhile, The Findlay Courier reported that Cooper CEO Roy Armes said at a Rotary Club meeting that he “does not see Apollo Tyres closing or curtailing the Findlay factory after buying Cooper.”
That also applies to Cooper’s plants in Tupelo and in Texarkana, Roman said, citing an earlier statement by Apollo regarding Cooper’s U.S. operations.
“Regarding plants, you are correct that Apollo said it ‘plans to maintain the networks and workforces Cooper already has in place and grow existing facilities to meet the combined company’s expanded needs,’” she said. “This has not changed and this is what Cooper CEO Roy Armes said yesterday re: Findlay … It applies to all Cooper facilities, including Tupelo.”
The Courier noted some interesting comments from Armes, including:
- The reality is, Cooper Tire is becoming a smaller player in an increasingly competitive industry, Armes said.
“We continued on a global scale to move from number eight (eighth-largest tire maker) to number nine, to number 11 in the global environment, and that began to get a lot of people worried,” Armes said. “We said, ‘Look, we’ve got to grow. Let’s look and see if we can marry up with some companies, acquire other companies.”
Combining with another company can bring sales gains, more diverse products and cost savings.
“The global intensity of the competition has grown immensely in just the last five years,” Armes said. “Scale has become more and more important on how we are going to really survive.”
- “Apollo had expressed interest in us and we basically said, ‘We’re not for sale. We don’t have any interest in joining together. We can do it on a project-by-project basis,’” Armes said.
But Apollo persisted and eventually made an offer which Armes has called compelling.
“Ultimately we got to a point where we told them ‘no’ so many times, they eventually put something on the table that our board had to really consider,” he said.
Cooper shareholders will receive $35 a share in the sale. That is 21 percent more than what Cooper stock closed at on Monday, and 40 percent more than it was trading for on the day before the deal was announced in June.