After its market cap tanked one-fourth post the acquisition of Cooper Tire & Rubber Co for USD 2.5 billion, Apollo Tyres’ management defended the decision to buy out the US-based firm in a press briefing on Friday.
The country's second-largest tyre maker said that not only is Apollo's India business ring-fenced from the huge debt it would take for the acquisition, but the takeover would actually de-risk the company’s business since it would be distributed across developed markets of Europe and the US and emerging markets of China and India. The management also said it is not unduly perturbed by the investigation ordered by a shareholding litigation firm in the US into Cooper’s stake acquisition. Neeraj Kanwar, vice chairman & MD, Apollo Tyres says, “This is a structure of the company, the way it stands today, and what we envisaged to do. So you have Apollo as a parent, which is Apollo India, borrowing USD 450 million only of new debt. The transaction cost is USD 2.5 billion. The remainder, USD 2.1 billion has been taken on the new entity, the holding company which is in Mauritius.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
