Cooper files complaint against Apollo Tyres in US court

Written by PTI | New Delhi | Updated: Oct 6 2013, 00:08am hrs
Cooper Tire & Rubber Company has filed a complaint in a US court to push India's Apollo Tyres to close its USD 2.5 billion deal to acquire the US firm.

"Cooper Tire & Rubber Company today filed a complaint in Delaware Chancery Court asking that subsidiaries of Apollo Tyres Ltd be required to expeditiously close the pending merger between the two tire companies in accordance with the terms of the definitive merger agreement," the US-based firm said in a statement.

Earlier this week, Cooper Tire shareholders approved its sale to Apollo Tyres, clearing the decks for the USD 2.5 billion transaction, billed as one of the largest acquisitions by an Indian firm in the US.

"We are disappointed that Cooper has taken this unusual step and question their motives. The litigation simply has no basis," an Apollo Tyres spokesperson said.

Apollo Tyres also said it is actively supporting Cooper in reaching a resolution in its financially damaging dispute with its Chinese JV partner.

The Indian company said in a June BSE filing that the transaction is likely to close in the second half of 2013.

"Cooper is asking the court to compel Apollo to take actions so that the transaction may close," Cooper Tire said.

Cooper Tire said in the complaint that Apollo is seeking to delay an agreement with United Steelworkers (USW), which represents Cooper employees at facilities in Findlay, Ohio, and Texarkana, Arkansas.

"We continue to have committed financing ready to launch, subject to resolving the USW issues and receiving current, updated Cooper financial statements. We look forward to closing as expeditiously as possible once we reach agreement with the USW and complete the marketing of our financing," the Apollo Tyres spokesperson said.

An arbitrator ruled on September 13 that as result of the pending merger, Cooper and Apollo must enter into new agreements with the union prior to closing, Cooper said.

By delaying resolution with the USW, Apollo is breaching the merger agreement, the US firm said.

"The a necessary step in the process to assure that the terms of the merger agreement are met as required and that we do everything possible to get the transaction closed promptly," Cooper Chairman, Chief Executive Officer and President Roy Armes said.

"The strategic rationale for the merger with Apollo is solid and we look forward to finalising the transaction, which will create the seventh-largest tire company in the world," Armes added.

On June 12, Apollo Tyres announced it would acquire Cooper Tire & Rubber Company in an all-cash transaction valued at about Rs 14,500 crore (USD 2.5 billion).

It said the combined entity would have a strong presence in high-growth end-markets across four continents.

As part of the deal, Apollo Tyres will take over the operations of Cooper, including eight plants and 14,000 employees, in different parts of the world.

The American firm is the 11th largest tyre maker, with revenue of over USD 4 billion.

In terms of tyre production, Apollo's capacity will more than double from 1,500 tonnes a day to 3,500 tonnes.