Indian tyre manufacturer Apollo Tyres is reportedly in discussions concerning the acquisition of a majority stake in US-based tyre manufacturer Cooper Tire & Rubber. These talks are said to be at an early stage.
Reuters, citing a source with direct knowledge of the situation, said the deal to acquire a majority stake in Cooper is valued at around US$1.3bn. Apollo Tyres has a market value of around US$840m.
Spokespersons from both Apollo Tyres and Cooper Tire declined to comment on this subject. Cooper Tire spokesperson Anne Roman stated: “We have a strict policy of not commenting on rumours and speculation in the market,” the newswire said.
The acquisition, if it should come to pass, would give Apollo Tyres access to the US tyre market, particularly the market for replacement car, and light- and medium-duty truck tyres.
A week earlier, Apollo Tyres announced that its board of directors had approved raising US$150m through qualified institutions placement to qualified institutional buyers. The supplier would not say where it intended to use these funds.
Reuters, citing its source, said the tyre manufacturer intended to use fresh borrowing and proceeds from the share sale to finance this acquisition. It is reportedly in talks with Standard Chartered for financing. The source added that Apollo Tyres has hired Standard Chartered and HSBC for the secondary share sale to raise US$150m.
