NEW YORK -- Cooper Tire & Rubber has walked away from a deal with India's Apollo Tyres that would have created the world's seventh-largest tire maker by revenue, the firm said today.
"It is time to move our business forward," Cooper CEO Roy Armes said in a statement, after a fruitless negotiation which saw the parties end up in court.
Apollo said in June it would buy the much larger Cooper Tire & Rubber (IW 500/225) in a $2.5 billion debt-funded deal.
But the move was never finalized after it became bogged down in labor problems embroiling Cooper's U.S. and Chinese operations.
The merger wound up in a U.S. court over claims by the U.S. firm that its Indian suitor was delaying the transaction to wrestle down the offer price and was suffering from "buyer's remorse."
Apollo successfully denied the allegations but conceded it would be tough at the initial offer price to find lenders to finance the deal due to Cooper's problems.
The merger was valid up to December 31 after which Apollo could drop the deal.
In the statement, Armes said the merger failed because Apollo failed to live up to its undertakings.
And he added that his company would "continue to pursue the legal steps necessary to protect the interests of our company and our stockholders."
He said Cooper's "top priority" would be to address the situation at the company's Chinese joint venture, where employees have staged a lengthy strike to protest the merger.
"Despite the challenges this year, we are coming off record operating profit through the first half of the year and expect to continue to be profitable for the second half, ending the year with a strong balance sheet," Armes said.
Copyright Agence France-Presse, 2013
