Cooper Tires Merger with Apollo Tires: Takeover, Method of Payment and the rescinding of the merger.
Seidman College of Business
The case study is a pedagogic tool for enabling students to understand the Event Study Methodology, Motives of Merger, Valuation, and the impediments in consummating mergers. The case study documents the series of events from the announcement date to filing of lawsuits challenging the proposals to abandonment of the proposal. The case study poses questions based on finance theory and human behavior to analyze the merger and its trajectory. Specifically, the analysis focuses on synergy, hubris, and agency motives of merger. The merger was not consummated because of impediments created by labor unions in a Chinese joint venture of Cooper Tiers and the bidder having cold feet. From the date of announcement of the merger the Indian Rupee depreciated by about 25% forcing Apollo, an Indian company to reexamine its price offer due to retrospective restrictions imposed by Reserve Bank of India. The case discusses the events from the date of announcement till the date of cancellation and provides an excellent laboratory for students to understand the motives for merger and the impediments in successful implementation of the union.
international Journal of arts and Sciences
Bhagwat, Yatin N. and DeBruine, Marinus, "Cooper Tires Merger with Apollo Tires: Takeover, Method of Payment and the rescinding of the merger." (2014). Faculty Scholarly Dissemination Grants. 977.