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US-based Cooper Tire & Rubber Co has called a special meeting of its shareholders on September 30 to vote on the proposed acquisition of the company by India's Apollo Tyres for Rs 14,500 crore.
In the meeting to be held in Ohio, the company has asked the shareholders to adopt the merger agreement with Apollo and also approve compensation to be paid to Cooper Tire's named executive officers related to the merger.
In a letter to shareholders, Cooper Tire & Rubber Co Chairman of the Board, President and Chief Executive Officer Roy V Armes said: "We cannot complete the merger unless holders of at least a majority of the shares of Cooper Tire common stock outstanding and entitled to vote at the special meeting vote to adopt the merger agreement."
If the agreement is adopted and the merger is completed, Cooper Tire will become a wholly owned subsidiary of parent (Apollo), he added.
"...Each of your shares of Cooper Tire common stock, par value $1 per share, which we refer to as Cooper Tire common stock, will be converted into the right to receive $35 in cash, without interest, less any applicable withholding tax, unless you have properly exercised your appraisal rights with respect to such shares," he added.
On June 12 this year, Apollo Tyres had announced that it would acquire Cooper Tire & Rubber Company in an all-cash transaction valued approximately at Rs 14,500 crore.
The combined company will be the seventh-largest tyre company in the world and will have a strong presence in high growth end-markets across four continents.
The deal, however, wasn't taken positively by market and Apollo Tyre shares had tanked by 26 per cent the next day on BSE forcing the company management to clarify that the move would not load its Indian operations with excessive debt.
Apollo had said that out of a total loan of $2.5 billion to fund the acquisition, the Indian arm had taken a loan of only $450 million. The major portion of debt of $2.1 billion would be leveraged on cash flows of Cooper and Vredestein, the company's Netherlands-based arm.
