The Cooper Tire & Rubber Company announced on Monday that it had ended its merger agreement with Apollo Tyres of India, saying that funding for the deal was no longer available.
The two companies had announced in June a deal for Apollo to acquire Cooper for $35 a share in cash, or $2.5 billion. The deal, which would have created the seventh-largest tire maker in the world, would have been financed entirely by debt.
But the deal foundered because of a dispute over problems at Cooper’s joint venture in China and an arbitrator’s ruling requiring that Cooper renegotiate its contracts with the steelworkers union. Apollo sought to renegotiate the terms of the deal, and Cooper accused the Indian company of acting in bad faith. The dispute landed in the Delaware Chancery Court.
“It is time to move our business forward,†Cooper’s chief executive, Roy Armes, said in a statement. “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. The right thing for Cooper now is to focus on continuing to build our business.â€
“While Cooper believes Apollo has breached the merger agreement, and we will continue to pursue the legal steps necessary to protect the interests of our company and our stockholders, our focus will be squarely on our business and moving it forward,†he added.
Shares of Cooper were down sharply in pre-market trading on Monday.
