Cooper Tire & Rubber Company announced it has terminated the merger agreement with India-based Apollo Tyres.
Cooper and Apollo had been wrangling over a merger with Apollo seeking to lower the takeover price. The matter ended up in Delaware Chancery Court, with Cooper unable to force a higher price for its stock.
“It is time to move our business forward,” said Cooper CEO 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. The right thing for Cooper now is to focus on continuing to build our business.”
“Our business model is strong, and 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. We look forward to continuing to execute on our strategy in 2014, and we have a very strong base from which to do this—brands that are respected for quality, a loyal customer base, a flexible global network of manufacturing facilities, a skilled workforce, and top technical capabilities,” Armes said. “Addressing the situation at Cooper Chengshan Tire (CCT) in Rongcheng, China is our top priority in the near term. The issues at CCT were driven by the merger agreement, and with the agreement now terminated, Cooper is working independently to restore normal operations at CCT, including obtaining the information needed for Cooper to resume regular financial reporting as soon as possible. Once the situation at CCT is resolved and regular financial reporting has resumed, Cooper will be in a position to address additional options for the deployment of capital targeted at returning value for our stockholders,” he added.
“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,” the CEO concluded.