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EXECUTIVE SUMMARY:
The paper studies the mergers and acquisition of Cooper tires by Apollo Tyres. The deal was made
official on June 2013. Both the companies, Apollo & Cooper, publicly announced about the merger
and acquisition with a deal value of $2.5 bn. But to the labour issue in china and equity holders
Members:
obstruction, there is a doubt about the true value of the deal from Apollo prospective. Currently,
Alok Kumar Singh (244)
Apollo is trying to bring the share value to $27 from previous $35 per share. We tried to find the
Pankaj Kumar
true value of the deal by considering various factors like: strategic analysis, pre-merger
HHI,(274)
postPratik
Chaudhury
(278)
merger HHI, anti-trust action, intangible valuation, accretion dilution, brand value etc. Finally,
we
Umakanta
Sahuacross
(294)
tried to see the current issues going on with the deal and the current events
happening
INTRODUCTION
On June 12, 2013, an Agreement and Plan of
Merger was reached between Cooper and Apollo
after a long period of negotiation. iUnder the terms
of
the
agreement,
Apollo,
the
largest
tire
th
th
RATIONALE
BEHIND
THE
2. Product portfolio
DEAL
1. Geographic expansion
Appendix 1.
3. Client Base
Cooper Tyres has big clients like Ford, Great Wall.
So Apollo can extend its client list to these
companies along with its existing clients like Audi,
GM, Fiat, and Hyundai.
4. The Synergy Effect
Alok Singh
IIM Kozhikode
Pratik Chaudhuri
IIM Kozhikode
Umakanta Sahu
IIM Kozhikode
Pankaj Kumar
IIM Kozhikode
iv
transformational
an
Cooper.
transaction
provides
Cooper
had
to
put
in
their
best
possible
AND RUBBER
premium
iii
over
30-day-volume-weighted
share
price).
Alok Singh
IIM Kozhikode
Pratik Chaudhuri
IIM Kozhikode
Umakanta Sahu
IIM Kozhikode
Pankaj Kumar
IIM Kozhikode
deal.
deal.
vii
CASE IN COURT
viii
calculations).
the merger.
ix
vi
Pratik Chaudhuri
IIM Kozhikode
Umakanta Sahu
IIM Kozhikode
Pankaj Kumar
IIM Kozhikode
xi
Valuation Excel
Appendix
Alok Singh
IIM Kozhikode
Pratik Chaudhuri
IIM Kozhikode
Umakanta Sahu
IIM Kozhikode
Pankaj Kumar
IIM Kozhikode
i Section 2.1 of the Agreement and Plan of Merger between Apollo and Cooper
Tyres(http://www.sec.gov/Archives/edgar/data/24491/000119312513256252/d555217dex21.htm)
iiPoint 2 of the Nature of Action section in Cooper Tyre(plaintiff) vs Apollo(defendant) case in the
Court
of
Chancery
in
the
State
of
Delaware(http://www.sec.gov/Archives/edgar/data/24491/000119312513392113/d609257dex991.
htm)
iii Point 2 of the Nature of Action section in Cooper Tyre(plaintiff) vs Apollo(defendant) case in the
Court of Chancery in the State of
Delaware(http://www.sec.gov/Archives/edgar/data/24491/000119312513392113/d609257dex991.
htm)
iv Point 5 of the Nature of Action section in Cooper Tyre(plaintiff) vs Apollo(defendant) case in the
Court
of
Chancery
in
the
State
of
Delaware(http://www.sec.gov/Archives/edgar/data/24491/000119312513392113/d609257dex991.
htm)
v
Section
6.3(a)
of
the
Merger
Agreement
between
Apollo
and
Cooper
Tyres(http://www.sec.gov/Archives/edgar/data/24491/000119312513256252/d555217dex21.htm)
vi Point 7 of the Nature of Action section in Cooper Tyre(plaintiff) vs Apollo(defendant) case in the
Court
of
Chancery
in
the
State
of
Delaware(http://www.sec.gov/Archives/edgar/data/24491/000119312513392113/d609257dex991.
htm)
vii Point 8 of the Nature of Action section in Cooper Tyre(plaintiff) vs Apollo(defendant) case in the
Court
of
Chancery
in
the
State
of
Delaware(http://www.sec.gov/Archives/edgar/data/24491/000119312513392113/d609257dex991.
htm)
viii Point 1 of the Nature of Action section in the Cooper Tyre (plaintiff) vs Apollo (defendant) case
in
the
Court
of
Chancery
in
the
State
of
Delaware(http://www.sec.gov/Archives/edgar/data/24491/000119312513392113/d609257dex991.
htm)
ixNews
Article-Despite
Bumps,
Tire
Deal
Still
Makes
Sense(Paragraph
(http://dealbook.nytimes.com/2013/11/12/despite-bumps-tire-deal-still-makes-sense)
2)
x News Article-US court gives clean chit to Apollo in merger deal with Cooper
Tire(http://articles.economictimes.indiatimes.com/2013-11-11/news/43930168_1_apollo-tyrescooper-tire-rubber-company-merger-agreement)