U.S. Court: Apollo Tyres Did Not Breach Terms Of Cooper Tire Deal

(RTTNews) - India-based Apollo Tyres Ltd said that on Friday it received a favourable 'partial ruling' from a U.S. court in its dispute with Cooper Tire & Rubber Co. (CTB) over their proposed $2.5-billion merger agreement.

In a response to the ruling issued on Friday by Judge Sam Glasscock, III, Vice Chancellor of the Delaware Court of Chancery, in relation to the complaint filed by Cooper Tire, Apollo Tyres said that it is pleased that the Delaware Court has found that Apollo is not in breach of its merger agreement with Cooper Tire.

Furthermore, the Court found that Apollo has used 'reasonable best efforts' to negotiate with the USW and that, contrary to Cooper's claims, 'nothing in Apollo's conduct indicates buyer's remorse.'

Apollo said it continues to believe in the merits of the combination and is committed to finding a sensible way forward.

On Friday, Cooper Tire said in a statement that it is disappointed with the decision of the Delaware Chancery Court that Apollo did not breach its obligation to expeditiously reach an agreement with the United Steelworkers per the terms of the merger agreement. Cooper also said it is assessing its options with respect to this decision and awaits the Court's ruling on other open matters in this case.

On 7th October, Apollo Tyres said it asked Cooper Tire to reduce the price consideration in light of labor issues in the U.S. and hurdles at the company's joint venture in China. A statement from Apollo Tyres had claimed that Cooper acknowledged that a price reduction was warranted and suggested that the companies were negotiating regarding the amount. However, Cooper had released a separate statement denying that it agreed to any concessions on the total consideration for its acquisition.

On October 4th, Cooper Tire said it filed a complaint in Delaware Chancery Court asking that subsidiaries of Apollo Tyres be compelled to expeditiously close the pending merger in accordance with the terms of the definitive merger agreement. The company alleged that Apollo was deliberately delaying a labor agreement with the United Steelworkers union in order to re-negotiate a better deal.

Cooper Tire stockholders voted overwhelmingly to approve the pending merger on September 30, satisfying Cooper Tire's final affirmative condition under the merger agreement to close the deal.

Findlay, Ohio-based Cooper Tire agreed in mid-June to be acquired by Apollo Tyres for $35 per share in an all-cash deal valued at about $2.5 billion to create the world's seventh-largest tire company.

The deal that was struck at a 43 percent premium was unanimously approved by the boards of directors of both companies.