Cooper takes suitor Apollo to court
Cooper Tire & Rubber Company has filed a legal complaint against the company that has agreed to buy it in a friendly takeover, Apollo Tyres. Cooper filed a complaint on 4 October in Delaware Chancery Court asking that “subsidiaries of Apollo Tyres Ltd be required to expeditiously close the pending merger between the two tyre companies in accordance with the terms of the definitive merger agreement”.
Cooper is asking the court to compel Apollo to take actions so that the transaction may close. Among other matters, the complaint says that Apollo is seeking to delay an agreement with the United Steelworkers (USW). The USW represents Cooper employees at facilities in Findlay, Ohio and Texarkana, Arkansas. An arbitrator ruled on 13 September that, as result of the pending merger, Cooper and Apollo must enter into new agreements with the union prior to closing. By delaying resolution with the USW, Apollo is breaching the merger agreement.
“Cooper has an obligation to protect the rights of our stockholders, who voted overwhelmingly in favour of the merger. With their approval, we have met our conditions for closing. The complaint filed today is a necessary step in the process to assure that the terms of the merger agreement are met as required and that we do everything possible to get the transaction closed promptly,” said Cooper Chairman, Chief Executive Officer and President Roy Armes.
“The strategic rationale for the merger with Apollo is solid, and we look forward to finalizing the transaction, which will create the seventh-largest tyre company in the world,” Armes continued. “Apollo is an outstanding company. We are confident both organizations will work effectively together to take advantage of the many opportunities this compelling transaction will offer within the world’s largest tyre market of North America as well as the fastest growing geographies including China and India. Cooper is well positioned in the competitive global tyre industry with highly respected brands, an extensive dealer and distribution network, quality products, outstanding customer service and top technical capabilities.”
Cooper shareholders voted overwhelmingly to approve the pending merger on Monday, 30 September. The pending merger was announced on June 12 after the boards of directors of both companies unanimously approved the sale of Cooper to a wholly-owned subsidiary of Apollo for $35 per share in a move valuing the company at around US$2.5 billion.