By Dennis Seid
As expected, Cooper Tire shareholders approved the company’s $2.5 billion merger with India-based Apollo Tyres.
Both companies’ board of directors had already approved the merger.
More than 74 percent of shareholders voted for the deal Monday morning.
The all-cash deal, in which Cooper would issue the notes to pay for the transaction, would form the world’s seventh-largest tire company.
But some hurdles remain before the merger is finalized.
Cooper’s two unionized plants in Findlay, Ohio, and Texarkana, Ark., cannot be sold until Apollo reaches a collective bargaining agreement, an arbitrator ruled recently.
In addition, Cooper’s joint-venture facility in China, Cooper Chengshan Tire, has hit labor troubles as well, with Chinese workers refusing to make Cooper-branded products.
They also have reportedly shut out Cooper management, even though Cooper owns 65 percent of the company. The plant employs 5,000 workers.
Both companies say they expect to work through those two major labor issues and expect the merger to be finalized by the end of the year.
In a statement following the vote, Cooper said more than 48 million shares voted in favor of the merger, representing about 96 percent of Cooper’s voted shares.
“We are pleased stockholders endorsed this compelling transaction, which will create a $6.6 billion leaders in the tire industry with a strong global footprint that includes a presence in the world’s largest tire market of North America as well as in the fastest-growing geographies of India and China,” said Cooper Tire Chairman, CEO and President Roy Armes.
Cooper shareholders will receive $35 per share if the deal is finalized, then the company would go private.
If the merger fails to materialize, Apollo, under certain conditions, would pay Cooper a $112 million breakup fee.