Fourth-largest US tyre group Cooper, parent of Wiltshire-based British motorcycle tyre manufacturer Avon, is being taken over by Indian tyre giant Apollo.
The deal, which was first reported some months ago and then later denied — presumably because negotiations were stalled or inconclusive — will now see Apollo paying £1.6bn in cash for Cooper. This will constitute the biggest-ever Indian acquisition of an American company to date.
Apollo Tyres managing director Neeraj Kanwar told Financial Times reporters that the transaction would give Apollo global scale and improve its position in US and European markets. In addition, he expects that it will produce annual savings of £50m-£70m from operating scale advantages, sourcing benefits, product optimisation and manufacturing improvements.
“We will be able to sell in developed markets and emerging markets across the world,” he said. “It really de-risks the entire strategy for the company.”
Apollo exports to 117 countries worldwide and already has a European plant in Holland. Apart from the Avon factory and its European HQ at Melksham in the UK, Cooper also has a production plant in Croatia.