The name may be as unfamiliar as the spelling to U.S. drivers, but Apollo Tyres is no unknown in its corner of the global auto-parts aftermarket. Its newly announced $2.5 billion acquisition of Cooper Tire & Rubber — the Ohio-based tire maker that is the world’s eleventh-largest with annual sales of $4.2 billion — follows acquisitions that included Dutch tire maker Vredestein Tires in 2009 and South Africa-based Dunlop Tyres International three years earlier.
This latest deal will make Apollo the world’s seventh-largest tire maker with annual sales of upwards of $6.5 billion across four continents. With car sales in India, Apollo’s largest market, falling for the first time in a decade and its sales in its second largest market, Europe, at a 20-year low, Apollo chairman Onkar Kanwar needed to find new and growing markets for his company’s premium and mid-tier tires.
The U.S. fits the bill on both counts — plus Cooper brings an expanded access to China, where it is a top-10 manufacturer of bus and truck tires and a supplier to the growing local manufacturing by U.S. automakers. However, at a 40% premium to Cooper’s pre-announcement share price, Kanwar is paying richly for his new tires.