Cooper Tire ends US$2.5b sale agreement with Apollo
Termination of deal ends months of stand-off as Indian firm said to have failed to find financing
Cooper Tire & Rubber terminated a proposed US$2.5 billion sale to Apollo Tyres yesterday, saying the Indian tyre maker had failed to find financing for the transaction.
The termination marks the end of a failed deal plagued by obstacles from the start. The Indian tyre maker agreed in June to buy Cooper for US$35 a share, hoping to transform itself into the world's seventh-largest tyre maker and cut its dependence on domestic sales.
Cooper did not mention whether Apollo would pay a US$112.5 million break-up fee, but said it believed the Indian tyre maker "has breached the merger agreement", and added it would continue to pursue "legal steps" to protect the company and its shareholders.
Apollo was not immediately reachable for comment.
The two firms have been mired in a bitter legal stand-off. Cooper tried to force the Indian firm to complete the deal under the agreed terms, while Apollo sought a price cut of as much as US$9 a share, citing Cooper's US labour trouble and disruptions at a Chinese joint venture.
"It is time to move our business forward," said Cooper Tire's chief executive 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."