Cooper Tire terminates merger agreement with Apollo Tyres
30 Dec 2013
US tyre maker Cooper Tire & Rubber Company today announced the termination of its $2.5-billion merger agreement with India's Apollo Tyres, after the latter announced that financing for the deal was no longer available.
Ohio-based Cooper Tire had sued its would-be buyer, Apollo Tyres Ltd, in a Delaware court, seeking an order forcing Apollo to close its $2.5-billion takeover deal after the latter said it would pay less than the $35-per-share it had agreed to pay earlier.
Apollo reduced its offer citing labour problems at Cooper's US operations and the uncertainties around its operations in China and the worsening financials at Cooper's North American business.
The Delaware court Judge Sam Glasscock had also rejected Cooper's allegations that Apollo was intentionally delaying negotiations with the United Steelworkers (USW), and ruled that it did not breach its obligation to complete its $2.5-billion acquisition of Cooper Tire & Rubber Co, as originally agreed to by the two companies (See: Apollo Tyres wins round 1 in Cooper Tire case in US court).
Cooper Tire & Rubber Co said it was not going ahead with a $2.5-billion merger with Apollo Tyres, although the company still held that Apollo breached the merger agreement, and planned to continue the legal steps necessary to protect its interests.
"It is time to move our business forward," said Cooper chairman, chief executive and president Roy Armes. "While the strategic rationale for a business combination with Apollo is compelling, it is clear that the merger agreement both companies signed on June 12 will not be consummated by Apollo and we have been notified that financing for the transaction is no longer available," Armes said.
"The right thing for Cooper now is to focus on continuing to build our business."
Apollo, which would have become the world's seventh-biggest tire maker had the deal been completed, wanted to pay less than the $35 per share agreed in June because of demands by unions at Cooper plants and disruptions at Cooper's venture in China.
