Cooper Tire & Rubber Company to acquire world tire operations of U.K.'s Avon Rubber p.l.c.

FINDLAY, Ohio--(BUSINESS WIRE)--Feb. 18, 1997--Cooper Tire & Rubber Company has entered into an agreement with Avon Rubber p.l.c. of the United Kingdom to purchase its tire operations for 68 million pounds (approximately U.S. $110.4 million).

The agreement was jointly announced today by Patrick W. Rooney, Cooper chairman of the board, and Steve Willcox, chief executive of Avon Rubber p.l.c.

The purchase agreement includes the complete Avon Rubber tire business; the land and manufacturing facility in Melksham, England; the shares of Avon Tyres Limited; the shares of Avon Technical Services; the shares of the tire distribution companies: Avon Pneumatiques (France), Avon Reifen (Germany), and Avon (Suisse) SA, (Switzerland); various intellectual properties, and other minor assets.

Primary Avon Tyres products related to the transaction include passenger, light and medium truck tires, high performance and racing tires, motorcycle tires, industrial tires, tire retreading and remoulding supplies. Cooper will obtain the worldwide right to use the Avon name with respect to tires, inner tubes and retreading materials.

The management of Cooper and Avon Rubber expect the sale will be completed within the next five weeks.

Avon Tyres had tire product sales in 1996 of approximately 104 million pounds (U.S. $168.8 million) which generated an after-tax income of 4 million pounds (U.S. $6.5 million) in the fiscal year ended September 28, 1996. In 1996 Cooper had sales of $1.6 billion and generated $107.9 million in net income for the year.

In announcing the agreement, Pat Rooney stated, "This is an exciting and logical global extension of Cooper's manufacturing and marketing presence. We are currently selling products in over 100 countries throughout the world, but this is our initial step toward expanding our tire manufacturing operations outside the U.S. to supply the world market. This preliminary endeavor toward globalization will be well supported by the excellent quality, fine reputation and market recognition of Avon Tyres products," Rooney said.

"We are fortunate to retain the strong Avon Tyres management team led by Rod Pottow. Further, we are obtaining excellent, high performance tire technology and a world-class ISO 9001 certified manufacturing capability. The Avon Tyres operation has great prospects for continued product development and international expansion," Rooney continued.

"Cooper and Avon have enjoyed a close and successful relationship since the early 1970's. We know, then, that the philosophies of our two tire operations are very similar," Rooney said.

"We are confident that the respective organizations can and will work together smoothly and efficiently. We are going to provide the necessary resources and support to assure that the Avon Tyres operation will continue to flourish as a high quality manufacturer and as an important international marketer," Rooney stated.

"We believe due to the synergies between the two companies, the long-term financial and operational benefits accruing to both Cooper and Avon Tyres, to our tire customers, and to our employees are going to be very significant because it places our enlarged and enhanced company on the global manufacturing stage. We intend to continue to secure and broaden a position as a world class player in the tire industry," Rooney concluded.

Avon Rubber p.l.c. chief executive, Steve Willcox, sees the sale as an important strategic move for Avon Rubber p.l.c. He explains, "We operate in a global climate of intense competition and increasing change. As a company with a long and highly productive past, we know the importance of evolving and shaping the business to meet customer needs. Our ability to adapt and change will play an important part in supporting our future success."

"The sale of our tire operations to Cooper will enable Avon Rubber to concentrate on its core business, engineered products, and, at the same time, assist Cooper in developing its tire operations globally. We believe this is a winning opportunity for both our companies," Mr. Willcox said.

Cooper indicated there is no reorganization or restructuring planned which would have an impact on general operations or overall employment at Avon Tyres.

Financing of the transaction by Cooper will be through the addition of long-term debt, and no equity issues will be involved. Based on the anticipated profitability of the acquired operations Cooper does not foresee, from the date of acquisition, any dilution of Cooper net income. The sales, assets and income of the acquired operations will be reflected in Cooper's financial statements after the transaction is completed.

At the end of 1996 Cooper's long-term debt stood at $69.5 million, representing 8.1 percent of total capitalization of $856.1 million.

Avon Rubber was founded in 1885 and has an established reputation for high quality products. Among Avon Tyres' original equipment automobile manufacturing customers are Rolls Royce, Aston-Martin and Land Rover. It is a premier supplier of sport racing tires such as Formula 3, Formula 3000 and Formula Ford. Avon Tyres is also the leading supplier of tire retreading and tire remanufacturing materials in the United Kingdom.

Avon Tyres products are sold in more than 50 countries, and the tire operation has technical agreements with tire manufacturers in Malaysia, Indonesia and Sri Lanka. The operation which Cooper is acquiring currently has an employment of approximately 1,200 associates.

Cooper Tire & Rubber Company, founded in 1914, specializes in the manufacturing and marketing of rubber products for consumers and industrial users. Products include automobile and truck tires, inner tubes, vibration control products, hoses and hose assemblies, and automotive sealing systems.

Cooper markets its products nationally and internationally through well-established channels of distribution. Among its customers are automotive manufacturing companies, independent tire dealers and wholesale distributors, and large retail chains.

Cooper currently has approximately 9,100 employees in 16 U.S. manufacturing and distribution locations and a manufacturing plant in Mexico.

Cooper Tire & Rubber Company stock is traded on the New York Stock Exchange under the symbol CTB.

CONTACT: Cooper Tire & Rubber Company

Patricia J. Brown, 419/423-1321