The proposed merger between the Cooper Tire & Rubber Co. and the Gurgaon-based Apollo Tyres, has been on shaky ground for months. Cooper Tire & Rubber Co. had plans to be bought by India’s Apollo Tyres Ltd. Now the deal is going to be dropped, the reasons cited for the fall through being a lack of financing. Cooper Tire & Rubber Co. will seek damages according to Bloomberg News. Apollo Tyres has stated that it’s disappointed and will also sue. Apollo Tyres planned to buy the U.S. tiremaker for $35 a share in a $2.5 billion deal.
The Chief Financial Officer at Ohio based Cooper Tire & Rubber Co., Brad Hughes said in a conference call that the company is seeking a $112.5 million in a “reverse termination fee.” According to Cooper Tires executives at the Indian tire producer had “buyer’s remorse” and then sought a price cut. It has been reported that Cooper’s Chinese partner, Cooper Chengshan of the Shandong Tire Co., opposed the deal.
Brad Hughes reported in a statement that the U.S. tire company “will continue to pursue the legal steps necessary to protect the interests of our company and our stockholders.” A spokeswoman for Cooper, Anne Roman, has stated that the company could not immediately comment on future litigation tactics or on possible damages that might be sought. The Indian company, Apollo Tyres, declined to comment aside from saying that it is studying Cooper’s decision.
Summary:
The proposed merger between the Cooper Tire & Rubber Co. and the Gurgaon-based Apollo Tyres, has been on shaky ground for months. Cooper Tire & Rubber Co. had plans to be bought by India’s Apollo Tyres Ltd. Now, the deal is going to be dropped, the reasons cited for the fall through being a lack of financing.
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