Cooper Tire calls off Apollo merger deal
Cites lack of funds to drop $2.5-bn deal
US-BASED Cooper Tire & Rubber on Monday terminated its $2.5-billion merger agreement with India’s Apollo Tyres. Cooper said Apollo notified it that financing for the deal was no longer available. “It is time to move our business forward,” Cooper chairman, CEO and president Roy Armes said. The announcement follows a Delaware Supreme Court ruling earlier this month in favour of Apollo in the spat over the merger.
COOPER Tire & Rubber dropped plans to merge with Apollo Tyres, saying financing for the transaction is no longer available following a valuation dispute with the Indian competitor.
The US manufacturer “will continue to pursue the legal steps necessary to protect the interests of our company and our stockholders,” Findlay, Ohio-based Cooper Tire said in a statement on Monday.
Cooper said on June 12 that Gurgaon-based Apollo planned to buy the US tyremaker for $35 a share in a $2.5 billion deal. Cooper had initiated legal action to force completion of the purchase, saying executives at the Indian conterpart had “buyer’s remorse” and sought a price cut.
Apollo has contended the US company’s value has declined partly because of potentially costly contract talks with the United Steel- workers union and difficulties getting financial data from Cooper’s Chinese partner, Cooper Chengshan (Shandong) Tire, which opposed the deal.
Portions of the proposed deal have been fought in court. On December 19, Apollo’s lawyers asked Delaware Chancery Court Judge Sam Glasscock III to deny Cooper executives access to a $112.5 million letter of credit that covers breakup fees.
The Delaware Supreme Court sent the case back to Glasscock earlier in December to decide whether Apollo wrongfully violated an agreement to buy the US tyremaker.
Glasscock last month rejected Cooper’s claim that Apollo breached the contract by dragging its feet in seeking to negotiate a contract with a the steelworker’s union that would have helped clear the way for the deal. Glasscock allowed Cooper to appeal his ruling to Delaware’s highest court, which declined to hear it.