By Dennis Seid
With a shareholders’ vote set for Monday, the $2.5 billion Cooper Tire-Apollo Tyres merger moves another step closer to being finalized by the end of the year.
But a few nagging issues remain.
Two weeks ago, an arbitrator ruled Cooper can’t sell its unionized plants in Findlay, Ohio, or Texarkana, Ark., to Apollo unless the India-based company recognizes the United Steelworkers union and deals with them first.
Cooper Tire Vice President of Communications and Public Affairs Anne Roman said, “Cooper Tire and Apollo are continuing discussions with the unions with an aim of reaching an amicable resolution quickly to minimize any impact on the original closing schedule by the end of 2013.”
In the merger, Cooper would take on some $2 billion in debt, which means it would have to pay $150 million to $200 million in debt service annually. Some critics of the deal say Cooper’s financials are not strong enough to support the deal. Other analysts say those fears are overblown, with major investment banks underwriting the merger.
Meanwhile, the Findlay Courier reported that Cooper Tire CEO Roy Armes said at a Rotary Club meeting Monday that he “does not see Apollo Tyres closing or curtailing the Findlay factory after buying Cooper.”
That also applies to Cooper’s plants in Tupelo and in Texarkana, Roman said, citing an earlier statement by Apollo regarding Cooper’s U.S. operations.
“Regarding plants, (it is) correct that Apollo said it ‘plans to maintain the networks and workforces Cooper already has in place and grow existing facilities to meet the combined company’s expanded needs,’” she said. “This has not changed and this is what Cooper CEO Roy Armes said regarding Findlay … It applies to all Cooper facilities, including Tupelo.”